Why It's Still Important to Have a Financial Plan

Why It's Still Important to Have a Financial Plan

It's hard to believe it's been six years since the 2008 credit crisis.

Events certainly got people to focus on their personal finances, but that focus seems to be ebbing.

Only 16% of Americans are including financial planning in their resolutions for 2014 — less than half the number who said so in 2009, according to an annual survey by Allianz Life. And fewer people say they will seek financial advice this year than last year.

I'd like to think that fewer people are seeking help because they no longer need it — that the experience of the past half-decade caused them to convert bad financial habits into good ones.

And the survey suggests this might be the case: Fewer now say they "spend too much money on things not needed" (26% in 2013, down from 30% in 2012), "don't save any money" (27%, down from 30%) and "spend more than I make" (14%, down from 18%).

Hurray! But these statistics are still too low — too many people are still doing a bad job at managing their finances. And reducing spending isn't the same as creating and abiding by a complete financial plan.

What prevents so many people from forming a plan? About a third of those polled (30%) said they "don't make enough money to worry about it." But that's crazy: The less money you have, the more important it is that you make the most of what you have! And a plan can help you do this.

Perhaps people don't plan because they are unaware of the importance of doing so. Or perhaps they question the value.

If that's you, try this: Prove your theory. Go meet with an advisor and see if there's value or not.

Come to our firm and let us show how you just how valuable financial planning can be for you, your family and your future.

Originally published in Inside Personal Finance March 2014

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