Why is Financial Planning Important for You?

October 6, 2011

October is the time to add some  Financial Planning to your life! The Georgia Chapter of the Financial Planning Association as well as FPA Chapters across the nation have named October 3rd through the 9th as Financial Planning week.

So Why all the Hubbub around Financial Planning?

There are many studies[i] that have been done over the last several years about Americans who have a financial plan and those who don’t. And as self-serving as it many sound, those Americans surveyed who have a financial plan and work with financial planners have many common characteristics. Americans who work with a financial planner:

  • Feel more confident about their financial futures
  • Have a clear financial direction
  • Are more likely to know how much they need to save for retirement
  • Feel ready to deal with market ups and down
  • Are more optimistic about their financial futures
  • Are able to save more than average

Having been a financial planning client for many years before I decided to make Financial Planning my encore career, I can honestly say that I enjoyed many of the above advantages. A consistent relationship with a financial planner did give me confidence, peace of mind and an annual review of my financial situation and investment direction.

Many Americans Say: It’s All in Their Head

Tongue in cheek, I’m talking about American’s financial plans. A recent survey sponsored by the CFP® Board showed that, 86% of the survey respondents agreed with the idea that everyone should have a financial plan.  And, 79% said they have a plan in place. However, less than half of the respondents have a formal plan in place––46% said they just have a plan in their head, and 11% just have notes and ideas.[ii]

Folks,  unless you have already met your financial goals,  having ideas in your head about your financial plan, just won’t cut it. Many of the formal written plans that I do for middle-income clients have more than 10 pages of information and two pages of recommendations. How can anyone keep all that detailed information in their head?

After having said that having a formal financial plan is important,  I think the survey respondents were simply trying to save face. It is clear to me that they really have no financial plan.  And, if you haven’t heard me say this before, ’If you fail to plan, you plan to fail.’

I know most folks are just plain overwhelmed by just the thought of doing a financial plan. But, I do urge you to give yourself the gift of a financial plan and a long-term relationship with a trusted financial advisor. That way you can work on reaching your financial dreams and goals year over year, one step at a time.

How do I choose a Financial Planner?

Here are two  sources that I trust will give you good advice on what questions to ask, what to consider and how to choose a financial planner.

Choosing a Financial Planner – FPA.net

CPF Board -How to Choose a Planner

Celebrating  Your Very  Own Financial Planning Month

Take at least one step forward with your own financial planning by doing one or more of the activities below taken from The FPA of Georgia’s article titled 20 Ways to Celebrate Financial Planning Week [iii]:

  • Balance your checkbook
  • Start a savings account for a child, vacation or a gift for yourself
  • Help teach your children how to save and spend wisely
  • Get your estate in order: Create or revise your will and other estate-planning documents
  • Call your financial planner and share your appreciation for their service
  • Pay off a credit card
  • Establish an emergency fund
  • Evaluate your employee benefits and begin planning for open enrollment
  • Develop your holiday spending budget
  • Plan for year-end tax strategies
  • Purchase a session with a financial planner for a relative, friend or colleague
  • Give a relative, friend or colleague a subscription to a personal finance magazine
  • Invite a financial planner to speak at your workplace
  • Review your insurance coverage
  • Write down your financial goals and revisit them periodically
  • Start using personal finance software to help you better understand your money
  • Look up three financial terms that have baffled you and resolve to understand them
  • Talk to a relative about their plans for long-term care
  • Talk to your relatives about your plans for long-term care

If you have thought about working with a financial planner, now is always the best time to move forward.  And, begin today by completing one or more of the suggested ways for you to celebrate Financial Planning week.

As always I welcome your comments and suggestions for future articles.

 Jane Nowak  is a CERTIFIED FINANCIAL PLANNER™ specializes in AT&T Retirement Plans, Women’s Retirement and Financial Planning for Women. Located in the Smyrna, Marietta, Vinings area of Atlanta, GA, Jane’s goal is to educate and empower her clients to take control of their daily finances so they can fully fund their retirement dreams and needs. Jane has recently had articles quoted and published on-line at the NASDAQ, Yahoo Finance, Womenetics.com, Smart Money Chicks, Fox Business News, CreditCards.com, U.S. News and World Report and Financial Planning Association (FPA) websites.

Securities offered through Triad Advisors, Inc. Member, FINRA/SIPC

                                                                                                                                                 


[i] Surveys by ING and Ameriprise Financial

[ii] The findings from the survey of 1,011 adults, conducted earlier this month by Certified Financial Planner Board of Standards Inc. in tandem with KRC Research

[iii] FPA of Georgia  20 Ways to Celebrate Financial Planning Week http://www.fpanet.org/WhatisFinancialPlanning/FinancialPlanningWeek

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Financial Fact:Women Won’t Ask For Directions

September 22, 2010

It seems to me that we ladies should stop snickering about the men in our lives who refuse to ask for directions when driving. While not being able to ask for directions is a decided blind spot for many men, we women do not have much room to talk. After all, on a far more serious note, most of us will not ask for directions when planning for our financial futures. We are far more content to ask our friends and family members for financial advice before we would ever ask a financial planner for financial advice! Right?

I think that getting lost in the car is far more benign than getting lost on your personal financial journey. Most women don’t have a minute to lose when working to establish a firm financial future. When it comes to finances, men are much more than willing to ask for directions from a financial advisor.  Why aren’t we women able to ask for financial directions?

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


Women Are in Need of Professional Financial Advice

July 30, 2010

 

 Financial Experience & Behaviors Among Women -10th Anniversary Study from Prudential  http://ow.ly/2iZi4

An excerpt from The Prudential Press release about the study:

The 10th anniversary study, “Financial Experience & Behaviors Among Women” revealed that 95 percent of women are involved in household financial decisions, with one-fourth acting as primary decision-makers.

But, while one-third believe that they “need a lot of help” and nearly nine in 10 of those who are looking for a lot of help need guidance on how to choose financial products that meet their needs, women are relying on informal personal networks for advice.

Forgive me but do I see a bit of a disconnect here? Many women need help and guidance with their finances but are using informal personal financial networks for advice. That seems scary to me. Unless, that is, your informal personal financial network is made up of CPAs, CFPs or other savvy financial professionals. I’m not trying to disrespect our loving and well-meaning friends, parents and family members. But, if they are anything like informal network, we’re in trouble. -Most of my informal personal network glazes over when I even mention personal finance, investing, estate planning etc.

Women need help with their finances. I contend that some of that advice should come from professionals. Okay, you say that because I am a Financial Advisor that I’m biased. That may be so. However, I worked with a financial advisor for 15 years before I became one.

Stay tuned for my break down and commentary on this study.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


Women Must Invest their Retirement Savings

July 9, 2010

 

Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.
~Will Rogers

All kidding aside, I know that investing can be risky. But, Will Roger’s solution will not work for us. I just some alarming statistics about women and investing.  Only 25% of the women surveyed buy and sell stocks or mutual funds. And, only 48% of women will be relying on their investments for retirement!

So, ladies in the 75% and 52%, are you planning to rely solely on social security to fund your retirement?

Let me disabuse you of that notion. The average social security retirement benefit for those who retired in 2009 is $1153 per month. Just ask yourself what your current monthly budget is. Then answer the question, can or do you want to live on the monthly amount that Social Security alone will provide you for the rest of your life? For most of us the answer will be  a resounding, no! 

If you have worked for several years already, you will be able to calculate your current retirement benefit.  You can check your retirement benefit at: http://www.ssa.gov/estimator/

 In fact, if you are older than 25, the SSA is already sending you a retirement benefit summary every year. The summary is sent 3 months before your birthday. Review your benefit information. Save this information with your financial paperwork .

The 1/3rd

The reality is that Social Security realistically may only give you up to 1/3 rd of your retirement income. -Of course, this may change (for the worse) as the baby boomers (r)age through the Social Security system.

 The other 2/3rds

  1.  401(k)s, IRAs, SEPs, 404(b) s, etc. are supposed to give us another 1/3rd.
  2. And, our personal savings are supposed to give us the final 1/3rd.

Ladies it is past time for you to trade in your piggy banks for stocks, bonds, mutual funds or ETFs. The only way to keep up with inflation is to invest your money. 

Your goal is to maintain or better your spending power by beating inflation. Even if you don’t have much saved, consider the riskiness of not investing. We are responsible for providing 2/3rds of our own retirement income. Long term investing is the way to grow your money.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


Financial Planning for Women: Feel the Fear and Continue to Invest

July 1, 2010

If you listen to television and radio or read newspapers, newsletters, magazines etc., you might be led to think that our financial world is teetering on the edge. Yes, economic times are quite difficult worldwide.

However, realize that whether ‘times are good or bad’ ,we are always teetering on the edge of a change in the financial markets. But with good reason, we simply feel better about impending market movements when times are good. Our optimism powers us forward.  Many of us are probably secretly thinking/hoping that an upward market trend will go on forever.

Since the market free fall of 2008, we are acutely reminded that investing is for the long-term and that ‘one size fit all’ investing does not work. Long-term investing is a turtle’s race. If you need your invested money in the next 10 years, the amount you need should not be invested in the stock market. Remember: Over the years, the stock market has always been a risky investment arena  -not just in 2008-2009.

Despite the recent ‘market mania’, now more than ever we must keep a balanced attitude when it comes to investing for our long-term futures. Women investors are notorious for investing too conservatively. And when fueled by fear, long-term investors (both male and female) may tend to make investment moves out of fear and not from a place of reasoned thinking.

So what should a woman investor do now?

  • Have a financial plan* 
  • Review your financial plan at least annually 
  • Stay the course with your financial plan
  • Increase your savings rate at every opportunity
  • Stop listening to the doomsayers in the media

*Your financial plan should always:

  • Match your time horizon
  • Match your risk tolerance

If your financial plan is right for your time horizon and risk tolerance, you will likely be able to continue to invest money in the stock market and sleep well at night.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


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