Why Financial Planning is for Everyone

Brian Cotroneo

I had a great conversation this weekend with a prospective client about Aviance’s financial planning process and whether it made sense for their personal circumstances. The more I described what we do, the more the client seemed interested – but also slightly self-conscious. After a few minutes, they confirmed my suspicion by saying: “this sounds fantastic, but I want you to know we don’t have $20 million dollars in the bank or any sophisticated needs. We’re young and have been putting money away without a specific goal in mind.”

This sentiment – that financial planning is only for the ultra-wealthy or those on the doorstep of retirement – is something financial planners hear often. For whatever reason, many people seem to think that for their financial goals to be important, they need to be extravagant. This couldn’t be further from the truth. In reality, very few people in their 30s and 40s have obtained generational wealth, but they still have legitimate financial milestones to prepare for such as home purchases, children’s education, etc.

That is why the decision to engage with a financial planner is so important, because no matter where you are in life, its likely you have something significant to prepare for. At the end of the day, that’s what a financial plan really represents: preparation. It’s a conscious decision to put your financial goals and opportunities on paper and begin acting towards their accomplishment.

The best analogy I can come up with is packing for a long trip. In my experience, the most effective way is to start a few days in advance by making a list of everything I will need. Then I start collecting the items, make sure the right clothes are clean, and have everything packed and ready to go the night before I depart. The alternative is the “seat of the pants” approach – where I wake up the morning of my flight and throw whatever clothes are clean (but maybe not the best options) into the closest suitcase available, stuff my toiletries in a dopp kit and head to the airport. I’ve used both approaches before, but you can guess in which scenario I find myself missing a phone charger, buying a replacement toothbrush, and generally feeling like the McCallister family in the opening minutes of Home Alone.

Some people will say they prefer the seat of the pants approach and that it still gets them to their desired destination. That’s perfectly ok – but I know I feel a lot better executing a vetted plan of action instead of making it up as I go along. That’s true of anything in life – whether it’s taking a trip, completing a home project, or planning my financial future.

The only differences are the stakes: I can miss a flight without lasting consequences. I might pay to rebook on a later flight and spend hours in an airport concourse, but eventually I’ll get where I need to go. However, with personal finances the impact to money and time is amplified significantly. Failure to prepare financially is unlikely to cost me $200 and a few hours; it could very well be measured in millions of dollars and years of time.

If that scares you, its ok, it’s a frightening proposition. However, it also means you have an idea of what you want your financial future to look like and a goal you’d like to accomplish, even if you haven’t developed a plan to achieve it. That’s where we can help – reach out to us and let us show you how.