Financial planning and retirement go hand in hand. Without effective planning, many people would never be able to retire. Others might have to work much longer than they hope to.
While financial planning is essential to achieve long-term goals, planning also can make it easier for people to meet their everyday financial needs. Managing money is a big responsibility, one that many people may need help with.
A recent survey from Pew Charitable Trusts found that 55 per cent of North Americans spend as much or more than they earn. That’s not only compromising their financial futures, but also making daily life more stressful, as the American Psychological Association’s annual “Stress in America” survey routinely finds that money is a top cause of stress among millions of people.
Adults who find it difficult to manage their money on a day-to-day basis may benefit from the services of a financial planner, professionals who can help people create effective long-term financial plans. They can also be vital resources for people who need help managing their money every day.
Here’s why:
• Planners can look at things from an unbiased perspective. An honest assessment of monthly expenses is essential when creating a monthly budget. However, many people tend to be biased when it comes to their monthly expenses.
For example, some may feel that three streaming service subscriptions are something they cannot live without. That can make it difficult to trim some of the fat from their monthly expenditures. A financial planner will begin by examining your monthly expenses and may or may not make unbiased suggestions regarding where you can save.
• Planners have the time. The average household is a hectic place. Adults with commitments at work and home often cite a lack of time as one of the reasons they aren’t more on top of their finances.
A 2018 survey from Bankrate.com found that 16 per cent of respondents aren’t saving more money because they haven’t gotten to it. Financial planners have the time to help clients save, and they’re an expense that pays for itself over the long term if families are saving more as a result of enlisting the services of a planner.
• Planners have the expertise many people lack. One of the reasons people struggle financially is that it can be hard to navigate the world of investments, insurance and taxes. Planners have the financial literacy necessary to navigate those waters successfully and can help people realize both their short- and long-term financial goals.
Financial planners don’t just help people plan for retirement. Many planners are equally effective at helping clients achieve their daily financial goals as well.
