Wealth Insights

5 key benefits of having a financial plan

Get a roadmap for pursuing your most important goals, from saving for college to retiring on your terms.

When you hear about creating a financial plan, you probably think it’s about long-term wealth building. And it’s true that some benefits of financial planning, such as accumulating wealth, take time and a disciplined approach. After all, the power of compound growth is best enjoyed over many years.

But financial planning isn’t only about the long game. According to research, it offers immediate benefits that can change your financial life. The act of creating a plan has the potential to provide the confidence to move forward with financial decisions, reduce stress, instill financial harmony and ensure a safety net for loved ones.

Whether you’re a seasoned investor or just starting out, collaborating with a financial advisor to develop a financial plan can provide several advantages. Here, we explore the top five benefits of working with an advisor through the process of financial planning.

1. Increase financial confidence

   Imagine seeing your entire financial life in one neat and organized place. At a glance, you can instantly understand your assets, liabilities and net worth. That’s the power of having an advisor with modern financial planning tools.

   This clarity translates into increased confidence: No more guessing or feeling overwhelmed by a complex web of accounts.

   Your advisor can also test hypothetical scenarios for you, such as what it would take to retire by 50, explore the impact of market ups and downs, or model savings strategies. Research shows that 93 percent of people seeking financial advice want to feel confident in their decisions, and financial planning has the potential to deliver that.¹

2. Help you and your partner get on the same page

   Money is a leading source of conflict for nearly one in four couples.² If that sounds familiar, envision finally being on the same page about your finances, regularly discussing your shared goals, and working together toward a bright future.

   When you go through the process of creating a financial plan with a financial advisor’s knowledge and objective perspective, these benefits are there for the taking. Creating a unified vision of the future based on shared values and mutual understanding can be a game-changer.

   Couples who seek planning and guidance from an advisor report greater agreement on their vision for retirement, find it easier to discuss money matters, and enjoy greater levels of financial well-being.² This harmony allows you to focus on what truly matters: enjoying your time together.

3. Protect loved ones

   Around 38 percent of men and 22 percent of women worry about their partner’s financial security in the event that they were to die first.² This is a valid concern, as many widows and widowers must deal with the emotional stress of such an event while making significant financial decisions.

   As part of a comprehensive financial plan, your advisor can help you explore several key strategies to mitigate this risk. This includes a thorough review of your life insurance coverage to ensure it aligns with your current and future needs. Your advisor can also help you maintain up-to-date beneficiary designations and organize important financial documents.

   Having a financial advisor with whom your partner feels comfortable means they have a trusted resource to turn to for guidance on managing finances and making sound financial decisions during a challenging period. An ounce of proactive planning can reduce your significant other’s burdens.

4. Decrease financial stress

   As part of the financial planning process, you’ll define your short- and long-term goals in specific terms. This goal setting can lend a sense of purpose and motivation. One of those goals will be to maintain an emergency fund, which can reduce the stress associated with sudden financial shocks, such as a job layoff.

   You’ll also map out your expected income and expenses, which can help you manage your money more effectively. Once you know your baseline, you’ll have a better idea of when you’re going off track. Knowing exactly where your money goes each month can give you a better idea of your priorities and the confidence to act on opportunities as they arise.

   Being prepared for life’s curveballs is appealing. Nearly half of Americans see a solid financial plan as the key to reducing financial anxiety.³

5. Improve financial outcomes

   Does financial planning improve financial outcomes? An often-quoted working paper from the National Bureau of Economic Research has some answers: “Planning has important implications for wealth accumulation … at the median, planners accumulate three times the amount of wealth than non-planners.”⁴

   When you consider that, on average, people with a financial plan have three times the net worth of those who don’t, it’s easy to see the value in creating a plan.⁴

   What’s more is that modern planning technology has made planning more accessible to a wider variety of investors. The research shows that you don’t have to be a multimillionaire to benefit from financial planning, and today’s tools make it possible.

Live the life you want

The process of creating a financial plan can be illuminating, showing you your priorities and goals and a potential path for pursuing them. Of course, a financial plan is a living document that allows for changes as time goes on. But by making ideas concrete and your intentions known, you increase your chances of living the life you’ve envisioned.

Talk to your advisor at Regions about:

1. Updating your financial plan or creating a new one.
2. Getting a holistic view of your financial situation.

Not sure how to get started with financial planning?
Answer some questions through our wealth management guide to take the first step.

Interested in talking with an advisor but don’t have one?
Find a contact in your area.