Shane Tenny, CFP®, answers one of the most fundamental questions about money, and that is what a financial plan is. He explains the four key elements that make up a financial and the six decisions we have to make around money.
Transcript:
[00:00:03.560 --> 00:00:12.210] Hi there, Shane Tenny, with Spaugh, Dameron Tenney here to answer one of the most fundamental questions about money, and that is what is a financial plan.
[00:00:12.510 --> 00:00:23.530] For most of us, we go through life and get to a point where we realize we need a little bit of advice or guidance or strategy around all the money decisions that we're making every day.
[00:00:23.810 --> 00:00:35.599] After a little bit of time searching Google or talking to friends. There's often a desire, or an appetite or a curiosity around having some approach that feels a little bit more holistic and inclusive.
[00:00:36.130 --> 00:00:39.070] And here enters the phrase, financial planning.
[00:00:39.190 --> 00:00:41.850] So, what, exactly, is a financial plan?
[00:00:42.250 --> 00:00:46.820] Well, the way we see it, there are 4 key elements to any good financial plan.
[00:00:47.130 --> 00:00:51.149] The 1st is that a financial plan is a strategy for the future.
[00:00:51.240 --> 00:01:05.370] Financial plans are based on your goals, your wishes, your hopes for the future. They're not backward-looking to indict or shame us over our decisions in the past. They're driven around helping us move towards the future. That we want to have.
[00:01:05.770 --> 00:01:14.079] The second key element is that a financial plan is going to help us uncover the smart decisions that we need to make around our money.
[00:01:14.230 --> 00:01:18.900] As the old saying goes, managing money is easy; managing ourselves is the difficult part.
[00:01:18.910 --> 00:01:27.199] And a good financial plan is going to help highlight the types of decisions that we need to make to move us towards the vision we have for the future.
[00:01:27.430 --> 00:01:32.920] Now, those strategies will generally align around 2 additional elements.
[00:01:33.330 --> 00:01:40.049] So, the 3rd factor in a financial plan is strategies that help reduce the risk of missing our goals.
[00:01:40.510 --> 00:01:59.170] Obviously, the whole reason we're undertaking a financial plan is to move in that direction. And so, the strategies and the decisions that we're inclined to make as a result of it should help reduce the risk of missing those. And a financial plan is going to help us track our progress toward the things that are important to us.
[00:01:59.260 --> 00:02:07.679] And that's it. A plan for the future that helps us manage our own money decisions, reducing risk and tracking our progress along the way.
[00:02:08.120 --> 00:02:19.790] Now, as you'd guess, there are a lot of money decisions that are part of a financial plan. And you'll find on our website other videos and articles we've written around the 6 Money Decisions®.
[00:02:19.920 --> 00:02:34.970] They are decisions around how we earn money, spend money, give money, whether it's voluntarily or to the IRS, how we protect money with insurance or legal strategies, how we save and invest, and how we borrow money.
[00:02:35.830 --> 00:02:41.260] Those are the all-encompassing decisions that are part of any thoughtful financial plan.
[00:02:41.440 --> 00:02:43.840] And this is what we do day in and day out.
[00:02:44.110 --> 00:02:50.370] If this type of approach would be helpful to you and your family, by all means, reach out. We'd love to see if we can be of help.
[00:02:50.770 --> 00:02:52.160] I'll see you back here next time.
