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The Importance of Financial Planning

BECU Investment Services

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Though financial planning may provide both present and future independence, unfortunately, only 30% of U.S. households have a long-term financial plan. But what is involved in financial planning? And who may benefit from these services? Learn more about what financial planning entails and just a few of the benefits it may provide.

What Does Financial Planning Include?

Today's financial planning services can be as narrow or as broad as you like. Financial planning may help you assess whether you are on track to work toward your goals, guide you toward various ways to save on taxes potentially (both now and in the future), and have appropriate insurance against risk. You may seek out advice from a financial advisor to help you decide on an investment asset allocation or create a 20-year plan for your financial future.

Some of the questions you may want to ask a financial advisor include:

  • How much will I need to save for retirement and when can I retire?
  • Do I have enough life insurance? Disability insurance?
  • What can I do to reduce my tax rate now?
  • What can I do to reduce my tax rate in retirement?
  • Can I afford to upgrade my house? My car?
  • How can I pay for my child's college education?
  • What should I consider when planning my estate?

The answers to these questions may vary based on your age, income, stage of life, and even your hobbies. But no matter your situation, a financial advisor can recommend steps to consider.

Benefits of a Financial Plan

A financial plan comes with a few discrete benefits.

First, it helps offload some of the tough mental labor of managing your long-term financial needs. Keeping up with tax changes and helping plan for investment fund allocations may seem like a full-time job. By working with a financial advisor, you may gain confidence and perhaps have more time to focus on your career, family, and hobbies.

Next, it can help you set concrete goals. Often, it may be tough to set goals on your own beyond "save more" or "cut expenses." A financial advisor may evaluate your finances to determine some realistic goals and a timeframe within which to work toward them.

Finally, having a financial plan may be a motivating force. Knowing that you have a financial advisor monitoring your progress and transactions may help you avoid the temptation to overspend and help you work just a bit harder to pursue your goals.

All in all, having a financial plan may provide benefits at just about every stage of life.

Talk to a Financial Advisor

Financial advisors with BECU Investment Services are here to help. Our team will take the time to get to know you, understand your goals and plan and implement a financial strategy that's appropriate for you. Set up a complimentary consultation or call 206-439-5720.

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Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

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