Mediocre Plans That Are Implemented Beat A ‘Perfect Plan’ That Isn’t
The financial markets and life in general can throw a lot of curveballs and potholes into the “perfect plan.” And now, inflation is another uncertain factor that investors must account for and are looking for greater guidance on.
Remember, if Eisenhower was waiting for “perfect weather” for the D-Day invasion in 1944, there would still be landing crafts bobbing off the shores of Normandy filled with 100-year-old troops.
It’s important that advisors demonstrate the holistic and continuous nature of planning by having a scalable and repeatable process to keep financial plans up to date, on track, and able to model for all of life’s what-ifs.
Start Reevaluating Now For The Short- And Long-term View
It’s clear that having, viewing, or updating a financial plan took on greater importance amidst social and economic uncertainty during recent years. Life events like home buying or retirement may have been put on hold or accelerated due to broader market conditions and you want to limit how inflation may cause further disruption.
For those without a financial plan or not yet being served by financial advice, I would recommend getting their financial house in order by way of some digital spending and budgeting tools. When inflation is on the rise for everyday goods and services, you want a better grasp of how that’s impacting your wallet—both in the short and long-term. Which of your spending categories has been most impacted? Will that have a prolonged effect if suddenly the $25,000/year tuition you are saving for costs $32,000 by the time you need to pay.
It’s easy to get overwhelmed and try and plan for every single contingency. However, that can quickly lead to “analysis by paralysis” and inaction. Rather, it’s important to take small, positive steps. For financial professionals, work together with your clients to make small changes and give them time to provide positive impact to the plan you craft together.
Joe Buhrmann, CFP, CLU, ChFC, is a senior financial planning consultant at eMoney Advisor.