Financial Planning Services Explained

In a two-part series about the differences between financial planning and financial life planning (part 1, part 2), I introduced a bunch of financial planning services. I want to go into a bit more depth about them here.

Core financial planning services

Cash Flow Planning

So you might be at a point in your life where you’re finally making enough money to not just pay the bills. Congrats, btw, but now what? What are you supposed to do with it? You start to ask yourself: How much can I afford to spend now but still save for whatever happens later? Should I pay off debt first or start investing? What should I put aside for emergencies? How much of my paycheck can I just blow on stupid shit?

Enter Cash Flow Planning. I call this the heart of the financial plan. Just like the heart receives and sends blood out to the different parts of the body, the cash flow statement allows you to see how the money that comes in is being “sent out” to things like housing, food, taxes, eating out and all the other places that your money seems to run toward. For many people, this exercise of knowing how they spend their money is a bit of a wake-up call. “WTF, 40% of my take-home on eating out!” (Yes, that happens). But your financial life doesn’t have to be this mysterious and shapeless. After all, it’s your money. All you need is a plan that allows you to do what you want now while being responsible for giving yourself what you want in the future.

College Funding

After little Jimmy goes 6 for 55 in his little league season, your plan of funding his college education with an athletic scholarship is looking pretty bleak. You suddenly realize that you’re totally behind the eightball. Worse yet, you don’ t even know how to get started. How much should I be saving? $100 a month? $500? Where do I put it? A brokerage account? A 529? 

What’s the difference? Someone mentioned a UTMA or a Coverdell. What the hell are those and who comes up with these names? 

By now you’ve surely heard this before: a college education is one of the biggest expenses of your life. And guess what? Most of the time, that’s right. So if you’re serious about giving your little prince or princess a proper education, then you’d better get serious about taking the right steps. 

Retirement Planning

This is all that other advisors talk about: “Let’s see how we can help you retire comfortably.” Yet here you are struggling to balance work, kids soccer practice, dinner, exercise and everything else in your hectic life. Retirement may not even be on your radar. But you do know that someday you’ll want the option to say “**ck it, I’m outta here.” You want to have the flexibility to do whatever you want (craft brewing anyone?) and not have to worry about running out of money. But when is that? And how can I make that day sooner rather than later? 

While “retirement” seems to be a word made up by the golf industry, having the financial freedom to live life on your own terms is certainly a reality. You just need to have a plan to do it. And the earlier you start, the easier it gets. Why? Because at that point you have a whole bunch of levers to pull to make changes. And best of all, at this stage even small changes have huge impacts in the long run. So start pulling, damn it.

Insurance Planning

I’m a big basketball fan, so allow me to indulge myself. Your team has the ball and is trying to score. Then, a few seconds later your team is now trying to prevent the opposing team from doing the same. (Great insight, I know.) Offense, defense. Every team looking to win needs to do both sufficiently well. You can’t suck at defense and still win.

In the financial planning world, we call this type of defense insurance planning. But a lot of people tend to overlook this critical part of the game. They’re too focused on offense: saving and investing. So they tend to get the absolute minimum coverage and hope for the best, or no coverage at all. But shit happens. Don’t get me wrong, we don’t want you to be over-insured either. But having the right type and amount of insurance in place is the name of the game. See what I did there?  :)

Tax Planning

Again, you’re making decent money and everything is looking pretty good. Then April 15 is right around the corner. You scramble to get your shit together and send off a bunch of statements to your (most likely online) tax preparer. You cross your fingers and promise that if taxes turn out OK, you’ll be more careful about it next year (which never happens). When all is said and done, you paid $21,000 in federal taxes plus a few grand more to the state. Ouch. And then you start questioning your (lack of?) a tax plan: How the heck do we owe so much in taxes? Are these numbers right? Wasn’t there a tax credit that we qualified for? Did it get applied?

Just so we’re clear: There is nothing legally, morally, or ethically wrong with you paying the least amount of taxes that you have to. Yet people constantly do that by not being proactive with their tax planning. Often, there are things that you could have done during the year that would have reduced your taxes. But by the time your tax preparer gets to them in April, it’s too late. Sometimes those things can save you a couple hundred bucks a year, which is great, but there are times when it’s thousands (stock options anyone?) And what makes this more critical is that these rules change pretty often, so if you’re not on top of it you’ll miss it. 

Estate Planning

Have you ever laid in bed late at night and thought , “What would happen if I died tonight? How would my family react? Would they be OK without me?” I think we’ve all been there. And while such morbid thoughts can sometimes be silly, sometimes they’re not. Face it, we’re all going to die. And some of us will become incapacitated before we do. I realize this is a bitter pill to swallow, but it’s a fact. So why not do something about it now to give you peace of mind, and then pray that it doesn’t happen for a very long time.

I realize the term “estate planning” is a little ‘blah.’ After all, many of us think we don’t have an estate. Oh, but you do. Your estate is everything that you have or own. Your body, your family, your house, your possessions, your retirement accounts, your dog. You get the point. 

Somebody has to decide what happens with all this if something were to happen to you. So why not be a little intentional about these very personal decisions?

Financial planning bottom line

I don’t know about you, but I think anyone can benefit from some or all of these services. And this is especially true for those of you in your 30s and 40s—you have more financial decisions to make. As I said, the earlier you start, the easier it is to correct the course and the greater the benefit. Don’t wait until you’re 50 or 60 to ask someone to look at your finances. Hire a professional to help make sure you are doing the right things with your money and help you avoid potentially devastating mistakes later.

How financial life planning takes these services further

Financial life planning puts a personal touch on traditional financial planning. I explain this in more detail in part 2 of the financial planning vs. financial life planning series I mentioned in the intro. 

But the gist is I take some time when we start working together to really get to know you through our personalized discovery process. Only after learning who you are and what you really want out of life can I properly advise you. That process is also a powerful self-discovery exercise for you. It’ll require you to look deep within to ask yourself tough questions. I find that clients learn a lot about themselves and the type of life they want to live as a result. 

Next steps

Now that you know what a financial life planner does and you think you’re ready to get started, learn more about us to see if The Coleridge Group is the right fit for you. And if so, click below to schedule a free consultation with me. I’m happy to answer any questions and provide more info about what we do and how it works.