Financial Planning Week
Last week was Financial Planning Week. This celebration of the joys of financial planning was brought to you by the Financial Planning Association (FPA). The FPA is a leadership and advocacy organization for those who provide, support and benefit from financial planning. Quite by accident, they picked the perfect time to put financial planning on a pedestal.
With all the turmoil going on around us, people are a bit nervous. Some of the largest banks, investment firms, mortgage companies, brokerage firms, and insurance companies are either going out of business or are being gobbled up. If they can’t survive this mess, who can?
The government has come and bailed us out of the jam…we think. The problem is that no one has ever tried to do what they are doing. So no matter how good an idea they have, we’ll all have to wait and see if it works. It took a long time to mess everything up, so it will take a long time to fix it.
Don’t forget that the housing crisis is still a crisis, unemployment is high and climbing, credit is still hard to find, filling your gas tank empties your wallet, and your 401k isn’t exactly looking healthy.
Then there are the problems looming in the future: Social Security shortfalls, Medicare heading to a disaster, and (regardless of the cause) global warming making it difficult for my favorite flightless bird, the penguin.
Plus, you still need to shop for Christmas.
No, it’s not time to find a tall building to jump from. Remember, we’re celebrating Financial Planning Week. And financial planning is what can allow you to maintain calm in the midst of economic calamity.
According to the FPA, financial planning is the long-term process of wisely managing your finances so you can achieve your goals and dreams, while at the same time negotiating the financial barriers that inevitably arise in every stage of life.
Financial planning is a process. And through that process you develop the goals that matter to you. Steps to those goals are then set in place. Potential obstacles are identified and plans are made to deal with them. That way, when the world seems to be falling apart, you can turn to your plan instead of turning to panic. You can react with knowledge instead of fear.
Can you plan for everything? No. But the process will help you in developing not only the skills, but the temperament to deal with the unanticipated.
It is well documented that most people spend a lot more time planning their future vacation than planning their financial future. They will get details on flight times, traffic patterns, hotel accommodations, restaurants and sightseeing to plan their trip. Yet when it comes to future finances, they’ll hope for the best.
Want to learn more? Surf to the following sites for more information on financial planning: The Certified Financial Planner Board of Standards (www.cfp.net); the Financial Planning Association (www.fpaforfinancialplanning.org); and the National Endowment for Financial Education (www.nefe.org).
Learn how to navigate through the turmoil around you. Don’t just react to what’s happening. Plan to deal with it.
Gary Silverman, CFP® is the owner of Personal Money Planning, a financial planning and investment management firm located in Wichita Falls. You may e-mail him at Gary@PersonalMoneyPlanning.com.