Leadership In 2022 and Beyond.
Traditional Leadership is full of ruthless managers who focus solely on profit and margin.
A s the definition of womanhood continues to evolve, so does every woman’s need to connect, assess and re-evaluate where she fits in the fast paced and everchanging world around her. While it’s impossible to define what womanhood means to all women, one thing I know for sure is women are taking charge of their finances. In 2015, I started my career in the financial services industry. At that time males made up the majority of my clients. Over the years, I have found myself having more female initiated financial planning conversations. Women have become more intentional about their finances. You cannot define womanhood without speaking of financial freedom and independence.
Having a solid financial plan is the first step in achieving your financial goals. But, where do you even start? You don’t have to figure it out by yourself, you can leverage the financial planning skills of a financial advisor. Before we create the plan, we need to define what your financial plan actually is.
What is a financial plan?
A financial plan is a document detailing a plan to reach your future financial goals. They take into account information about your assets, debt and other relevant data to assess your current financial situation. With this information, your financial advisor can create a plan to get to where you want to be in the future.
The best practice for financial advisors is to use the 7 steps of financial planning to get you there:
1. Understand your financial situation
Before we can create a plan for your future, we need to know where you are today and your individual situation. To do so, we’ll begin by collecting current financial information:
- Income and tax information
- List of assets and their value (e.g. savings accounts, emergency fund, retirement & other investment accounts, property, etc.)
- List of debt and the amounts (e.g. bond, vehicle finance, student loans, credit card, personal loans, clothing accounts etc.)
- Insurance policies
2. Determine and decide on goals
The next step is to establish your financial goals. What do you want your financial circumstances to be in the future? This is the fun part, the part you get to dream. Your advisor will separate your goals into short-term goals, medium term goals and long-term goals. These are things that you would like to accomplish within 1 to 3 years, 3-7 years and more than 7 years, respectively. Here are some questions (not limited) that you can ask yourself:
At what age do I want to retire? How often would I like to travel? Do I want to get married? Do I want (more) children? Will I need to take care of aging parents? What do I want to be able to give to charity/philanthropies? Do I want to start a business? How much risk am I comfortable with?
Some examples of goals that you may set for your financial planning process include: Paying off debt, creating an emergency fund, saving for retirement, getting life insurance, drafting a will etc.
3. Analyse the information & data
Your financial advisor will collate the information and analyse the information. The date will give further insight and guidance into your finances and what you are currently doing to reach your goals. It will also reveal gaps that you will need to address when creating your plan.
4. Create a plan
The preliminary work done with your financial advisor so far all leads to this step—creating a financial plan. Your financial advisor will detail exactly what you need to do to accomplish the goals that you established in step 2.
5. Presenting your recommendations
Your financial planning recommendations are now presented to you. During this discussion, you'd learn how the plan was developed. The discussion between you and your advisor aims to ensure that you are aligned with the plan and the plan is aligned with your financial objectives.
6. Start using your financial plan
After creating your personal financial plan, implementing your financial plan is one of the most important steps in financial planning. You have to change your current habits, unlearn certain behaviours; implementation requires discipline and consistency.
7. Review, monitor, & update your plan
A financial plan is a dynamic document. So you will consistently evaluate your progress and make adjustments based on life circumstances and changes in your priorities.
Life changes can include getting married or divorced, having children, a change in careers, or perhaps a death in the family. Each of these things is a reason to re-evaluate your financial goals and realign your strategy.
The importance of having a financial plan
A financial plan lays out a clear path for you to follow to reach your future financial and life goals. It not only lays out a plan but it is used to track your progress and identify necessary adjustments to make. Studies have shown that having a written plan increases your likelihood of reaching goal and helps you prepare for the future. The plan evaluates your current financial situation, identifies your goals and helps monitor your progress.
*The information in article does not, and is not intended to, constitute financial advice and materials on this site are for general informational purposes only.
