Category: Advisor Content

Author: Daniel Routh

The Importance of Financial Planning

Date: 01/03/19


“There’s nothing like a good plan coming together,” is a phrase I heard often growing up. My dad, a project manager with an engineering background, spent the last 30 years of his career planning major construction projects around the world dealing with tight budgets, environmental regulations and politics. You name it, he’s probably planned for it.


As kids, we don’t much appreciate planning until we start experiencing inconveniences. Maybe you plan to ride bikes on worn tires to the local pool and get a flat tire halfway home so you’re forced to walk. Or “forget” about your summer reading until the last weekend of summer and have to spend your last hours of freedom not with friends, but locked inside reading.


As adults, however, the necessity of planning becomes a part of everyday life and financial planning becomes critical. Whether you are a recent graduate learning to shop for groceries efficiently so you don’t spend as much money on takeout, newlyweds saving for your first home while also trying to start a family or a late-career professional figuring out what life will look like in retirement, a well thought-out financial plan gives you a foundation for current and future decision making while still doing the things you enjoy most.


However, the most perfectly crafted plan eventually becomes stale unless it is updated and evolves as personal circumstances and laws change. Unexpected illnesses, job changes or other life events can dramatically affect your overall financial fitness in 2019. These changes necessitate that a financial plan should grow and adapt with you.


To ensure your financial plan is on track in the New Year, start by following these four steps:


1. Conduct an investment check-up. The beginning of the year presents a great opportunity to take stock of your investment plan. Set up a meeting with your Exencial advisor to check on the status of your asset allocation and investments.


2. Review retirement plan contributions and tax withholding levels. Most people experience salary changes throughout the year. Whether you received a raise, got promoted or were awarded a bonus, it’s important to reevaluate what is being taken out of your paycheck. Double check that your preferred retirement plan contribution percentages and tax withholding levels are still in line with your goals.


3. Outline a tax projection. Work with your Exencial advisor and Exencial tax preparer to estimate what you will owe in taxes for 2018. There may be ways to further optimize your tax returns to cut down your bill, such as making additional contributions to an IRA or Roth IRA before the April 15 deadline.1


4. Plan ahead. Start thinking about moves you can proactively make now to set yourself up for financial success. Whether it’s getting ahead of quarterly tax payments or setting up an emergency fund, putting the time in now will help save you money and stress down the road.


Financial planning is all about allowing you to spend your time and money on what matters most, whether that is taking more vacations with your family or being able to donate to causes near and dear to your heart. It’s a continuous process, and “there’s nothing like a good plan coming together.”


Sources:

1. IRS – IRA year-end reminders


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About the author

4054781971

DRouth@exencialwealth.com

Oklahoma City, Ok

Wealth Advisor

Dan Routh, CFP® joined Exencial Wealth Advisors as an Associate Planner in March of 2016 in the Oklahoma City office. Dan works alongside the wealth advisors and investment team to research, build ... CLICK HERE TO READ MORE