Top 5 Questions To Ask Yourself Before Making A Financial Plan

Are you dreaming of enjoying your retirement in style? Well, you need to have enough money to do everything you want during your senior years. It can be a difficult task, especially if you’re still in the planning stage. You can consult a financial consultant on how to get started if you’re unsure.

Many Americans lack the desire and knowledge to save money or create a financial plan for their retirement. According to Flow Financial Planning’s Meg Bartelt, people who consult with her said they are clueless on how to make a financial strategy. 

A 2016 U.S. Bank study, meanwhile, showed just 41% of Americans know how to prepare a budget.

Questions You Should Ask Before Creating A Financial Strategy

There are several things to consider in your financial planning process. According to veteran financial planners, you need to ask yourself several critical questions before starting your financial planning agenda. Here are some essential questions you should ask yourself first:

1. How Much Is My Income And My Expenses?

Making a realistic accounting of your financial state allows you to realize that you need a plan badly. You may want to consult an independent financial advisor to examine your finances. Among the documents you should prepare are your tax returns, your latest 401(k) plan statement, your bank and credit card statements, and your insurance policies and other investments.

2. What Are My Worst Financial Worries That Are Keeping Me Up At Night?

Knowing your financial pain points will give you the motivation to pursue a financial plan. If you worry about your car loan payment or how to pay for your kid’s tuition, you will be forced to save money, change bad spending habits, and invest in your future.

3. How Is My Relationship With Money?

It is essential in your personal financial planning to determine your spending habits. Determine how you use your money and assess whether it fits your values. You can analyze your financial attitude by examining your debit and credit statements.

4. What Am I Trying To Achieve With My Financial Plan?

Having a clear goal for your finances can give you the extra motivation to succeed. If you have high goals, your strategy will be a combination of savings and investments.

5. Do I Need To Hire Financial Advisors?

You can create a financial on your own by getting information from others or online resources. However, seeking the services of a veteran wealth manager can direct you to the right path from the get-go.

How To Choose A Financial Advisor?

Hiring the right financial planner can help you avoid the common mistakes made by neophytes like you. Here are some tips for selecting a financial consultant for your specific needs:

  1. Determine whether you already need the services of a financial advisor. According to financial planner Nicole Rutledge Regilio, if you can already save at least 20% of your annual income, you may consider hiring one.
  2. Decide what type of financial advisor best fits your needs.
  3. Ask for referrals from relatives and friends, or do your online research.
  4. Verify the credentials, certifications, and licenses of your shortlisted advisors.
  5. Interview your shortlisted professionals to determine your perfect hire.

Planning for your retirement or significant financial needs is essential to avoid financial difficulties and achieve financial independence during your senior. By seeking the help of financial professionals, you can start with strong foundations.