The importance of Updating Your Financial Plan Each Year

Financial Plan

New Year’s resolutions look different for everyone, but they all have the same goal: to make sure this year’s version of you is improved in some way over last year’s. That change can come in the form of weight loss, a new job, or financial goals.
Like a New Year’s resolution, your comprehensive financial plan should be revisited each year. A financial plan should be a living document that changes with your life. If the goals you made last year look different this year, your plan should be flexible enough to accommodate your new vision.

Resolutions represent positive changes that we act upon to bring change about in our own lives, but unfortunately, life brings about changes we didn’t plan for. Look at 2022 as an example; if you were able to retire at the beginning year, the 18% drop in the market may have affected that. If you are reviewing your financial plan and you’re uncomfortable with how it performed in the previous year, it’s ok to make changes.

Goals Accomplished or Goals Added
Your comprehensive financial plan is a living document that should change with your life. When I build a financial plan for an individual, I work with that individual to help them understand their goals, both financial and personal. With this understanding, together, we can build a plan that focuses on money’s purpose instead of just its performance. With this understanding of money, we can focus on achieving goals. If life brought about changes in the past year, maybe a new child or a change in income, then it’s reasonable to think that your purpose may have changed also. A comprehensive financial plan will be flexible to those changes.

In the same token, if you have achieved a financial goal, maybe you are contributing the maximum amount to your IRA, then your plan should also adjust with that. Through a combination of discipline and accountability from your advisor, you will start to see your goals becoming tangible.

Proper financial planning should be about the long-term. When I build a plan with a family, I am helping them create a tool that makes the things they have worked hard for possible. There will be challenges along the way, but we don’t plan for bumps in the road; we create a plan that can adjust and overcome those bumps.

Anchor Wealth believes in the power of a comprehensive financial plan; that’s why we include one in every engagement. If you are working with Anchor, it is time to review your comprehensive financial plan. If you aren’t currently working with an Anchor advisor, give me a call. Together, we can look at what went well for your family and what you would like to change from the last year and then put those learnings into a plan that works for you.

By Dan Leonard