Don’t Delay Financial Planning
By Team Seneschal

We are often caught up in the whirlwind of life, juggling careers, family, social engagements, and personal endeavors. The idea of planning for the future, especially when it comes to finances, can easily take a backseat.
Why should we prioritize financial planning?
The Importance of Financial Planning
Financial planning is about ensuring we have enough money for the future. It’s creating a road map to achieve our goals and secure our family's well-being.
Whether buying a new home, funding your child's education, or retiring comfortably, a financial plan can help you determine the resources needed to meet these objectives.
Unexpected events can arise at any time. Planning ensures unforeseen circumstances, like medical emergencies or job loss, don't derail your financial well-being.
There's a unique satisfaction in knowing that you're prepared for whatever life throws at you. A robust financial plan can offer this assurance.
Here are some other benefits of financial planning:
- Increased confidence: A survey from Charles Schwab found that 65% of people with a written financial plan reported feeling financially stable, compared to only 40% of those without a plan. Many of those with a plan felt “highly confident” they would reach their goals.
- More savings: A Hearts & Wallets survey of 5,794 households found those with a financial plan had more savings than those without one.
- Better financial habits: Those with a financial plan are more aware of fees in their brokerage accounts, more likely to have an emergency fund, and more likely to stick to a monthly savings goal.
Consequences of no planning
Failure to have a financial plan in place can have severe short and long-term consequences:
- Living Paycheck to Paycheck: Without a financial plan, you might find yourself in a cycle of spending whatever you earn with little or no savings.
- Unforeseen Expenses: Accidents, illnesses, or other unforeseen expenses can strike without warning. Without a plan, these can quickly become financial disasters. Half of Americans have less than $500 in emergency funds available, which is woefully inadequate.
- Retirement uncertainty: A lack of planning can lead to inadequate retirement savings, forcing you to defer and maybe never be able to retire. Here’s a shocking statistic: 50% of women and 47% of men between 55 and 65 have no retirement savings.
- Divorce: Money is consistently among the top reasons couples get divorced. Taking the time to align goals and create a plan with your spouse is an opportunity to avoid money-related reasons people get divorced.
Getting Started
Once you commit to financial planning, start by taking these steps to build your plan:
- Financial goals: Define and prioritize your financial goals. They may include big goals like buying your dream home or a vacation property, funding your children's education, starting a business, or saving for retirement. They could also include paying off debt, building up savings, or other goals that can increase financial security.
- Tax planning: Consult a Certified Public Accountant to identify tax savings opportunities.
- Emergency Fund: Having an emergency fund will reduce stress, keep you from making impulsive spending decisions, and help prevent you from making poor financial decisions when confronted with unexpected expenses. According to Vanguard, most experts believe you should have at least 3-6 month’s living expenses in your emergency fund.
- Debt management: A critical part of financial planning is reducing and eliminating debt, especially high-interest credit card obligations. Debt management involves tracking your spending, setting debt priorities, balancing saving with paying off debt, and living within (and preferably below) your means. Depending on your situation, consider ways to streamline and save money on debt repayment.
- Insurance: Insurance (primarily life, disability insurance, and long-term care) is critical in financial planning. Insurance doesn’t just protect in the event of death or disability. Properly structured, insurance can be a source of cash reserves and provide tax benefits. It can also be used to add diversification to your investment portfolio. Adequate personal property insurance is also important to protect against devastating loss that could force a need to dip into other assets.
- Retirement planning: Here’s sage advice from Jack Van Derhei, research director of the Employee Benefits Research Institute. “Regardless of the amount you save, you will definitely be in a better situation if you start early than if you wait until your mid-30s or 40s. The longer you wait, the more you will have to save—until it becomes too great a burden.”
You’ll need to understand retirement savings plans available and other tax-deferred accounts like traditional and Roth IRAs. When investing outside retirement plans, consider low management fee index funds, exchange-traded funds, and passively managed funds in a globally diversified portfolio, using an asset allocation (the division of your portfolio between stocks, bonds, and cash) suitable for your risk tolerance. - Estate planning: Estate planning involves implementing your health care wishes and setting forth how you want your assets distributed after your death. Without an estate plan, your assets will be distributed in the manner provided by the laws of your state of residence, which may not be consistent with your intent.
Final thoughts
As wealth advisors, we understand prioritizing financial planning isn’t just about numbers or accounts. It’s about adopting behavior that will create a future where dreams are realized, and uncertainties are met with preparedness. As our clients navigate their present, we help them keep one eye on the horizon, ensuring that every step taken today aligns with the promise of a secure tomorrow.
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