Organization: The Key to Sound Financial Planning

A route I’d highly recommend for true financial advice and planning is to have someone in your corner who accurately understands both your current situation and future goals

While it’s easy to talk about your finances from the surface level, you may find yourself struggling to answer slightly more in-depth questions. Could you answer the following questions without hesitation?

• What are the allocations and balances of your old 401(k) plans?
• What are the interest rates and payment amounts for each of your student loans?
• What are the coverages of your employer-provided life and disability insurance policies?

If you can answer these questions off hand, you’re ahead of most of the potential clients I sit down with. If you can’t answer these, don’t worry—you’re in the majority!

Getting financially organized is as important a step to financial planning as any. It allows a financial advisor to dive into specific facts about your finances instead of rounding and guessing. One way to stay organized is to have the login information of all your accounts and policies in a secure location so that you can easily access them at will. Another, more efficient way, is to have a personal finance aggregation tool such as an app that can help track your spending, finances, protection, and everything in between. Lastly, the most efficient way to incorporate accountability and help get your finances in order is to work with a financial advisor that will help you get organized via their financial planning process and/or software. Financial planning software can allow the client to link their bank accounts, credit cards, loans, investments, and so on to one location where the advisor can monitor their financial situation in relation to the goals that they help the client establish.

Utilizing a financial advisor and their resources will allow you to not only aggregate your financial life, but to also use the data to develop your financial plan based on your specific goals. Where many people encounter financial trouble is when they don’t have the steps in place to develop clarity within their financial life. Having a clear, organized picture of your financial life will allow you to develop a well-rounded strategy to help you follow through on each step of your plan. Ensuring that you are organized will lead to more confidence in your financial situation, trust that your overall strategy is on track, and a sense of comfort when it comes to understanding your finances.