Is Developing A Financial Plan Really That Important?

Even if you haven't read his novel, The Little Prince, you have likely heard of Antoine de Saint-Exupery. But, you may not know that he became a laureate of several of France's highest literary awards, and also won the National Book Award.Given all these accolades, I imagine monsieur de Saint-Exupery knew something about setting goals. saint-exupery

For those of us who want the data to back up the hypothesis - such as yours truly – I found the April 2014 Forbes magazine article "Why You Should Be Writing Down Your Goals" very compelling.

In short, the article summarized a study that was conducted on the 1979 Harvard MBA graduating class. Students were asked if they had set clear, written goals for their future. The results:

• 3% had written goals and plans.• 13% had goals, but they weren’t in writing.• 84% had no goals at all.

Ten years later, the same group was interviewed again and the results were astounding:

• The 13% who had goals, but had not written them down, were earning twice the amount of the 84% who had no goals.• The 3% who had written goals were earning, on average, ten times as much as the other 97% of the class combined.

We believe that creating a financial plan may have a similar impact – that is, help you meet your life goals and your financial goals.

The BenefitsI have seen it over and over again. A client walks into my office, dreading the financial planning process, only to walk away feeling more confident, empowered, and prepared to weather whatever life throws at them.

Other than creating confidence and feeling prepared – which, I think are reasons enough – what are some of the other benefits developing a plan?

Improve Your Relationships - According to a recent survey from the American Institute of CPAs, money is the most common topic married and co-habitating couples argue about. Of over 1,000 American adults polled, 27% said that disagreements over finances were most likely to erupt into an argument -- not children, chores, work or friends.* How many of you are nodding your head saying, “Yep, that’s us”? Developing a plan together helps to facilitate the conversation in a non-emotional, constructive way. And having a third party present – your financial planner – helps to create a more constructive, respectful environment.

Reduce Your Stress - If you think of your financial planner as a coach – someone who is on your team, there to help you and not judge you - then the relationship immediately becomes less stressful. Consider your financial planner as a resource, assisting you not only setting goals, but developing financial strategies for managing behaviors that may not be serving you - as well as someone who can directing you to other resources that can assist you.

Be A Positive Role Model - According to the 2013 survey, “Teens & Personal Finance” conducted by Junior Achievement and the Allstate Foundation, 76% of the respondents reported that the best time to learn about money management is kindergarten through high school; but only 29% of reported programs are currently in place. As most of you know, I am a big fan of Junior Achievement – they do a fabulous job. But like so many things, parental role modeling is critical to a child’s development. If my client has children, then I encourage them to bring the children to our meetings. This kind of role modeling can go a long way in setting a child up to be, at minimum, more financially aware – not to mention, observing that both parents are engaged in the money conversation.

Fulfill Your Life Goals - Per the statistics from the Forbes article, if you write your goals down, they are more likely to be realized. At Alexis Advisors we don’t start with your financial goals, but rather with your personal life goals – viewing money as a tool to help meet a goal, but not as a goal in itself. Part of our job is to help clients clarify their life goals first. Our work then is to use our experience to help them meet the financial goals that support their life goals.

I am going to end this blog by answering the question posed in the article title, "Is developing a financial plan really that important?"

Yes, we believe it is really important!... Well, only if you want to improve your relationships, reduce your stress, be a positive role model to your children, and meet your goals.


If we can help you create your reality, please give us a call.

Join the Conversation!


*Source: Huffington Post | Couples Argue About Money The Most, Survey Shows, May 4, 2012.

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