The Power of a Written Financial Plan: Achieving Measurable Goals
For anybody hoping to achieve financial independence, one tool stands out as a necessity - a written financial plan. More than a mere document, a financial plan is a guide that helps steer you towards your financial goals. Before you start rolling your eyes or scrolling for the next article to read, here are a few reasons why having a written financial plan is not just helpful, but essential for achieving measurable financial success.
Documenting Financial Goals
The process of writing down your financial goals forces you to clearly define what it is you want to achieve in your life and outline the steps you need to take to get there. For example:
- Retirement Goals: For almost everyone, a primary financial goal is to save for a comfortable retirement. Writing your goals related to retirement, including understanding how much money you’ll need to have to retire with confidence, makes it a concrete objective, not just a vague idea.
- Paying Off Debts: A lingering debt can be both an emotional and financial burden. By including how and when you will pay off your debts in your written plan, it becomes a priority with a clear deadline and action items.
- Homeownership: A dream home can be more than just a dream with a clear financial plan. By writing down this goal, and understanding what may need to happen financially in order to get there, this dream converts into a true target.
Providing Clarity and Direction
When your financial goals are laid out in clear sight, you will gain a sense of clarity and direction. The act of writing transforms nebulous dreams into concrete, achievable targets. This clarity allows for informed decisions and devises effective strategies to achieve your goals.
A Constant Reminder and Motivator
Life is full of unexpected twists and turns. Amid these distractions, a written financial plan acts as a constant reminder of what you are striving for. It helps to keep you disciplined and motivated, ensuring I continue to make progress towards your goals.
Reviewing the financial plan on a consistent basis allows you to measure your progress and keeps your goals prominently top of mind. The act of reviewing provides a sense of achievement and the encouragement to continue. Also, it helps identify any hurdles that may need to be overcome.
Adapting to Changes
The true power of a written financial plan lies in its adaptability. As life evolves, so do financial goals and circumstances. A written plan isn't set in stone; it's a dynamic document that grows and evolves as you do. It reflects on your financial journey and allows for adjustments and amendments as needed.
Writing down a financial plan helps to unlock the path towards financial freedom. The power of this simple act cannot be overstated. I encourage you to experience the power of a written financial plan and let it guide you on your journey to financial success.
Note: The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Lauren Smith and not necessarily those of Raymond James.