Having a financial plan can make the difference between achieving your money goals and feeling lost. This challenge will inevitably escalate for those who are managing small businesses as sole proprietors, and therefore need to mix their personal and business money. The good news is that there are financial planners that exist to help both newcomers and veterans, alike, make the best possible decisions for their finances. Here are a few of the benefits of personal financial planning that you could enjoy if you choose to work alongside a financial planner for your accounts.
What Is Personal Financial Planning?
Personal financial planning is a cooperative relationship between a client and an expert in money management. While a financial planner will not make decisions for you, they have years of experience that can guide your choices. They can also help you make decisions that are grounded on evidence, data and previous success.
Of course, your specific financial goals will shape what you should look for when hiring a financial planner. Some planners offer a wide variety of consulting services, while others prefer to specialize in certain areas like retirement, succession planning or business growth. Those who often intermingle their small business finances and personal finances-or for whom there is no difference-can especially benefit from a personal financial planner to help them keep everything organized and allocated properly.
Financial planners offer a variety of benefits of personal financial planning according to the type of professional you work with. In general, you can expect that they will assist you with:
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Smooth Allocation of Resources
If you operate a small business or hold multiple types of accounts, it can be tricky to determine where to put your money. Perhaps you are considering keeping your whole balance in a savings account to earn interest until you need it. Or maybe you need cash available for sudden purchases but feel that you are missing out on growth opportunities. No matter how you currently manage your financial matters, a financial planner can offer advice on how to divide and allocate up your money. They may encourage you to use different types of accounts, keep your business and personal finances separate, or come up with a way to merge the two effectively.
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Saving for Financial Goals
Of course, the primary purpose of money is not to simply collect it-it is to help you accomplish your goals. A financial planner will sit down with you to learn what those goals are and then make suggestions about changes that can bring you closer to success.
Part of this process will loop back into allocating your resources; that way, you can be sure that you are not spending money that is dedicated to certain long-term tasks. However, it also comes down to breaking your goals into realistic steps, choosing what is important and perhaps modifying how (and how much) you spend each month.
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Comprehensive Retirement or Succession Planning
Some people want their assets-just like they want their small business-to be passed on after they are gone. Others want to continue working part-time or with a financially beneficial hobby in their later years. Financial planners can help lay the groundwork for success in these areas. They can guide you in creating succession documents or plotting out how much money you will need to maintain your quality of life after you retire. Proper planning now means a greater chance of success in the future.
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Growth of an Emergency Fund
No one can truly predict when an emergency might happen-and this is why it is critical that you keep an emergency fund on hand. A financial planner can help you locate small ways to fund an emergency account if you do not have one yet, and if you do, they can work with you to determine how much to keep on hand.
With the guidance of a financial planner, you are less likely to need to take out loans or borrow money in order to weather a difficult time. Thanks to their years of experience, planners can also keep you informed of which types of emergencies are the most likely to have a future impact on your financial situation. That way, you can be prepared-even for events that you have not yet experienced.
Trust the Experts to Help You Make the Best Decisions for Your Financial Future
Financial planning can be a useful service that utilizes the broad-scope knowledge of a professional to help inform your decisions. If you would like to speak to someone who can offer insights into your unique situation, be sure to trust the experts. At Inflection Advisors, we are happy to work with you to create a robust plan that will serve you for the long term. Reach out to schedule an appointment to refine your money habits or create a strategy that will help you achieve your goals.
