How a Financial Plan Puts You in Control During Times of Turbulence

How a financial plan can help in uncertain times and periods of stress

As we all know, when life doesn’t go as planned, it can create a tremendous amount of financial stress. Any unexpected change in personal circumstances such as a job loss, divorce, or illness can disrupt your sense of security. For some, extended periods of volatility in the financial markets can also contribute to financial stress. 

These rocky periods can lead to financial anxiety that manifests in many forms, including obsessive behavior like constantly checking your financial accounts or being frugal beyond reason, sleepless nights, feeling depressed, or even in some cases hoarding. If you feel stressed about money, you’re not alone. A 2022 Stress in AmericaTM survey by the American Psychological Association found that 72% of Americans reported stress about money. 

A Comprehensive Financial Plan Is Full of Knowledge

As financial advisors, we believe that having a comprehensive financial plan is an important way to cope with financial stress. While a financial plan can’t eliminate the underlying problems causing worry, it can help put you in control.  

One of the gifts of a comprehensive financial plan is that it is full of knowledge. As you know, knowledge is power. This empowerment is what ultimately helps manage financial anxiety.

The plans we create for our MPPL Financial clients act as both a roadmap and a powerful, dynamic decision-making framework that keeps them informed of the tradeoffs and implications of critical decisions they face.

For example, financial plans help answer important questions:

  • Where you stand relative to important life goals, such as when you can retire, whether you can afford a vacation home, or the best ways to help pay for your grandchild’s college education.
  • What your financial future may look like. How much financial flexibility do you have to sustain your desired lifestyle as circumstances change?
  • How to pivot when circumstances change. We help clients determine how to adjust their finances after job loss, loss of a spouse, or divorce. Sometimes the pivot entails a change in investment strategy; other times we work with the client to adjust their spending.

Using a Financial Plan as a Decision-Making Tool 

We use dynamic financial planning software that allows us to easily conduct real-time scenario planning showing clients the potential impacts of different assumptions. The types of assumptions we can adjust frequently include things like changes to the average growth rate of your investments, amount of your spending, and amount you save. The financial plan helps assess the implications of taxes based on current law and is always updated to stay current on inflation rates.