We've talked a lot about financial planning and financial planners: what each is and why they're important. By now you're probably wondering, "when should I get financial plan?" Well, today we're here to discuss that!
When should I start financial planning?
The simple, easy answer to that question is right now. Many people may feel like financial planning is a "someday" thing to worry about. Something to worry about when you are older or have more money. But wherever you're at right now is a good enough place to start working on a plan for your finances and your future. By this we mean, now is a great time to assess where you're at, and understand where you want to go.
One reason it's so important to start now is that overwhelming data shows that women will earn less money over their lifetimes. And time is one of the biggest advantages you have when it comes to your retirement.
Let's look at an example:
(we assume that you can make a 6.1% gain on your investments after fees every year).
Investing $100 when you're 25 will give you $1,000 when you're 65
Investing the same $100 when you're 45 will give you $300 when you're 65
Time is the most important advantage you can give yourself.
As we've talked about before, a financial plan looks at where you currently are, and where you want to go. It outlines your financial goals and what you need to do in order to reach them. Financial planning is an ongoing process that helps to reduce your financial stress; support your needs today; and help you meet your long-term goals for your future money, like retirement or buying a house.
Why you shouldn't wait to start financial planning
Having a financial plan early-on is really important and financial planning isn't just for the wealthy either. Getting yourself a financial plan and creating that roadmap and strategy for your financial future is for everyone. Not knowing where you stand financially can be really stressful. A financial plan can help point you in the right direction financially and help you understand your spending and saving habits.
If you think financial planning is something you don't need to do until later in life, or that even if you wanted to start now no one would help you -- these are huge misconceptions. No matter what age you are or what your net worth is, starting early and giving yourself time can be your greatest advantage. Time will help you to grow your net worth to the point where you can meet all your financial needs and financial goals, and become financially independent.
In addition, starting a financial plan right now can help you to set realistic goals for yourself, and figure out the right plan for you to achieve them - which can help to alleviate stress. According to a Financial Planning Standards Council study, which included about 15,000 Canadians, Canadians who engage in comprehensive financial planning report significantly higher levels of financial and emotional well-being than those who do no planning or limited planning.
Can I start financial planning on my own?
You can start by making a financial plan on your own, or you can get help from a financial planning professional or service such as Untangle Money. If your situation is straightforward and fairly simple, you know you can hold yourself accountable, and you're able to do the research answer your own questions and evaluate information to find the best solution for your situation, then you can likely handle financial planning on your own. However, it can be nice to have a helping hand, because this sounds like a lot, especially if your financial situation is more complex.
Here at Untangle Money, our financial plans consist of a series of phases that are mapped to you as an individual. We'll take your financial goals, including debt, retirement and other things like buying a house or a car, and organize them in a way that will help you make the most out of your now money, and your future money. It's a great place to start!
Financial independence is a huge part of being a strong, independent woman, it is our mission to help women successfully set themselves up financially.
At Untangle Money we help women understand their (real!) financial picture, and obtain financial guidance from people that actually, really, get it. We would love to help you, too. Join the community of hundreds of other women looking to strengthen their financial well-being. Get in touch here for a free consultation!