What’s a Financial Plan?

Growing up I wanted to be either an interior or fashion designer. My love for interior design was sparked by hours of watching Trading Spaces after school, creating floor plans for my childhood bedroom, and building custom houses on The Sims (anyone else!?)

My love for fashion design was inspired by my mother making my clothes for me growing up, teaching me how to sew at a young age and encouraging me to make my own clothes when I couldn’t find what I wanted in stores. Even as a child I had a strong sense for my personal style and a vision of the clothes I wanted to wear. My mom finally got frustrated dragging me to store after store only to not find what I was looking for. I was stubborn to a fault, so she encouraged me to start making my own clothes. I loved our trips going to the fabric store together to pick out patterns and fabric.

In case you were wondering, my career as a clothing designer was short lived and consisted of a one of a kind blouse (pink clip dot cotton – I have a type), a floral skirt, custom handbag and lots of pajama pants. In high school, I took a fashion and design class and our final project was creating a fashion line, hands down my favorite project in high school.

Obviously, life had other plans for me because I am not an interior designer or a fashion designer. Instead I am a financial advisor and absolutely love my job.


As a financial advisor I can still use the skills and aspects that I loved of my childhood dream jobs. One way, that I use these skills is creating financial plans for clients. When creating a plan, I get to use the puzzle solving aspects that came with interior design and I can create a customized and unique product just like I did as a budding clothing designer.

So, what exactly is a financial plan? I like to compare a financial plan to a financial road map for your life with the final destination being retirement. Not everyone views retirement in the same light, but I think most of us can agree that they want the ability for work to be optional at some point in their life. For those of you who have been on trips, you can appreciate that the journey is more than just the final destination, it’s a combination of all the detours, bathroom breaks and points of interests along the way.

Let’s hit the road.

Financial Goals

A well designed financial plan is like the ultimate road trip, the final destination has been selected but to maximize your time in the car and to take advantage of being in a new part of the country there are other stops along the way. My family growing up would always travel by car for vacation and it was never a straight shot to our destination. My dad is a big history buff and if we were within a couple hours of any Civil War battle site, you better believe we were stopping.

The detours and points of interest along the route are the financial goals a family seeks out to accomplish during their lifetime. These additional goals could include paying for college tuition, buying a second home, taking a big anniversary trip or family gifting. Each family I work with is different and has a unique collection of financial goals they hope to achieve. This is the custom design element that I love about financial planning that reminds me of designing a new piece of clothing or room interior.

Inventory + Savings

Once the road map has been outlined, the next step is to take inventory to determine what else is needed to ensure a successful trip. In the case of a road trip you would need a reliable car, a GPS and resources like time and money to ensure you make it to your destination safely and on time. The same is true of a financial plan, to ensure success it’s important to inventory all financial assets and liabilities to determine where improvements are needed to make the plan a success.

A financial plan creates a snapshot of where you are today and projects out where you are going. The plan takes into consideration planned savings goals into employer 401(k)s, IRAs and other investment accounts to project future account balances. The point of this exercise is to quickly identify if savings targets are sufficient to support future financial goals or if changes are needed to ensure a greater likelihood of success.

It is a powerful exercise to understand at an early age how shifts in spending/savings habits can positively impact future financial goals. This leads to conversations with clients on cash flow management and finding the right balance between spending and savings. This aspect of financial planning reminds me of laying out floor plans for different rooms using existing furniture pieces and working in new elements that will work within the allotted space and budget. At the end of the day it is a big puzzle and there is no one right answer.

Investment Strategy

The final step of creating a financial plan is using the outputs to make an informed decision on an investment strategy. An investment strategy, at its core, is what percentage of assets should be invested in the equity markets vs. the fixed income markets and what will the investment philosophy be if there are major swings in the market. A financial plan will point to an investment strategy that compliments the various financial goals and increases the probability of meeting those goals.

Think of the investment strategy as the engine of the car you plan to take on the road trip. You can choose a “souped” up engine that will fast track your trip but could be dangerous if you encounter weather en route or you could choose the more moderate engine of a mini-van that will add time to your journey but ensure safer passage despite weather conditions. Having a financial plan will put these various engines into perspective and will serve as a guide to choose the best investment strategy for your financial goals. This final step of creating a totally customized plan for a client and reminds me a creating a customized item of clothing that I felt comfortable wearing and reflected my personal style.

In Summary

So it turns out that I didn’t totally abandon my dreams of becoming an interior or clothing designer. In my role as a financial advisor, I am still able to problem solve and design thoughtful plans customized for each of my clients. More importantly, the custom pieces I create for clients can help give them a confidence and direction around these questions:

  • Will I be able to accomplish all my financial goals? Am I on the right track?
  • Am I saving enough?
  • Am sacrificing too much today to save for tomorrow?
  • Am I invested properly to meet my goals?
  • Will I need to work the rest of my life?

Interested in creating your own financial plan or want to learn more about the process? Feel free to reach out directly by filling out a contact form.

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