What is a financial plan
Financial Planning

What Exactly is a Financial Plan?

Creating a financial plan is your first step in tracking your financial goals. This article answers the question of what exactly is a financial plan?

Last week I talked about four planning opportunities COVID-19 has brought us.  Before I wanted to dive into these – let’s first talk about, what exactly is a financial plan, and why should you have one?

A financial plan is in fact quite literally what it implies – it is a plan. It’s a plan put into place that is driven by your financial goals, and it maps out what you need to do to pursue meeting these goals. It provides clarity on a direction to take. It takes the guessing out of the equation – and provides a clear map for your progress.

A plan is living – it moves and changes with your life, so as life changes, it can adjust and keep you on track towards what you ultimately are hoping to achieve.

It’s like driving a car.  Would you pack up your car for a vacation, pack all the kids in the car, turn onto the highway and drive, without knowing where you’re headed?  Not usually!

Same thing with a plan.  How do we decide what to do with our money, if we don’t know what we are planning for?

What exactly is a Financial Plan – Common Goals

Here are some of the most common goals I hear from our clients: 

  • I want to make sure I am saving enough to retire in my 60’s. 
  • I want to save up to buy a vacation house.
  • I want to save enough to pay for our kid’s college.
  • I want to not financially worry about day to day transactions, and if a surprise expense pops up, I want to be prepared. 
  • I want to move and buy another house. 
  • I have employer compensation and stock options that I want to take in the most beneficial way for my situation.
  • I may leave my corporate job and start my own business.  I want to have enough saved up to feel secure during that transition. 
  • I want to make sure that if something should happen to me, my family is provided for
  • I don’t want to take more risk with my investments than I absolutely have to.

So that is where we start – and everyone has different goals.  There is no goal that’s too large, small, or insignificant.  We factor all your goals in and then create a toolbox filled with tools, in other words, strategies, in order to pursuing these goals.  Some common tools/strategies we use:

  • income maximization and expense budgeting.  How can we create more resources available for funding goals? 
  • A savings plan.  A savings strategy is key to pursuing financial success. 
  • Account titling and retirement plan usage (key for business owners!)
  • Maximizing benefits, executive compensation, and employer resources at large corporations
  • Investments and rates of return.  How do you know if your investment choices are pursuing where you want to end up? 
  • Tax strategy – taxes are a top erosion of wealth. 
  • Insurance and risk mitigation products, to provide security for you and your family while you are working towards goals. 
  • Estate planning, to ensure your wishes for your beneficiaries are met.
  • Business planning – coordinating with your tax advisor, we help guide you to make choices, so your business is working for YOU towards your goals.

What is a Financial Plan – Summary

Why guess if you are on track, when you can have clarity?

That is the basics of what financial plan looks like.  Start with goals – and build using your tools to get there.  We look out into the future and project what the future will look like – as far as taxes, inflation, rates of return, economic changes, etc. and project how your current tools will work and grow.  Given that, we can estimate a likelihood of achieving those goals.  Each year, we check in with the plan to make sure you are on track given any changes that have occurred.


Securities offered through LPL Financial, Member FINRA/SIPC.  Investment Advice offered through Marshall & Sterling Wealth Advisors, a Registered Investment Advisor.  Marshall & Sterling Wealth Advisors and Kelsey Ponesse are separate entities from LPL financial. 

Opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations.  To determine which investment may be appropriate for you, consult with your attorney, accountant, or financial advisor prior to investing.

Kelsey is a Wealth Planning Advisor and Certified Public Accountant at Marshall & Sterling Wealth Advisors, located in the New York tri-state area. Kelsey enjoys working with those who feel they find themselves juggling various financial goals and they aren’t sure where to put their money first. Whether it’s saving for their children’s education, maximizing corporate benefits large corporations, or wanting to know if they can afford that dream upstate house, she helps them pull the pieces together into a clear path to success. Kelsey has an MBA and B.S in Accounting from Alfred University. She also holds her Series 7 with LPL Financial, Series 66 with LPL Financial and Marshall & Sterling Wealth Advisors , and New York life insurance and annuity license. Prior to working in wealth management, she worked as an auditor in both the public and private accounting industries. In her free time she enjoys running and exercising, reading, and she is an enthusiastic supporter of local businesses, specifically in the Hudson Valley. She can be reached at reached at kponesse@ms-wealth.com or 845-554-1046 x2353. You can read more about Kelsey and Marshall & Sterling Wealth Advisors at www.ms-wealth.com.

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