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Your Financial Game Plan

Do you know where you're going?

"Do you know where you're going to? Do you like the things that life is showing you? Where are you going to? Do you know?"

These are the opening lyrics from "Theme From Mahogany (Do You Know Where You're Going To)” for the 1975 film Mahogany. The film is a love story about Tracy Chambers (played by Diana Ross), an aspiring fashion model who must make a choice between the man she loves and her dreams

Like Tracy, all of us face major choices. Often, the decisions can be tough ones, particularly when it comes to financial decisions. Choices made today can have a ripple effect that can last a lifetime. There is no perfect answer. But if you know where you're going, it can really help you make decisions.

As the son of a Baptist preacher, I find that I often relate to things from a biblical perspective. In the context of financial planning, Proverbs 29:18 feels like the perfect starting point: "Where there is no vision, the people perish."  

Granted, financial planning was not what King Solomon had in mind, but it is a wise admonishment that certainly applies. If we don't take the time to look at where we are going (and try to get there intentionally), we subject ourselves to the whims of life's waves as they come crashing down on us.

Having a defined financial goal or game plan is something we would all like to have in place, should have in place and yet for an infinite number of reasons many of us don't.

See also: Your Retirement Action Plan >>

It's likely your game plan will differ from mine. Your financial situation may be simple or more complex. Yet the bottom line is you need a game plan. For many of us, once we decide and commit to building a game plan we can do it ourselves. Resources like AARP can be an invaluable place to find some of the help you may need. But what if you need professional help? What are some of the things you should look for to help you make the decision?

People reach out to a professional financial adviser for a variety of reasons. Often, they do it because they find the myriad of decisions to be frightening or terribly complex. I have clients who choose to work with me not because they can't understand it, but because they don't have the time or inclination to do it by themselves. And others simply want an objective second opinion.  

Do your legwork first before you pick a professional adviser. Here are a few tips: 

What type of education does the adviser have? I suggest looking for broad-based credentials, such as certified financial planner (CFP), personal financial specialist (PFS) or chartered financial consultant (ChFC). These are all respected financial credentials that can't be earned over a weekend at a hotel.

Understand how you will pay for the services up front. Any method of compensation has potential pitfalls. Make sure you understand what you're getting.

Get referrals. Do more than ask for a name. Ask detailed questions about how the person might be helpful in your situation.

Trust but verify. Modern technology has made it easy to quickly verify the identity of someone. Look for disciplinary history. 

Protect Yourself Against Frauds and Schemes >>

Whether you do it yourself or hire a professional, you need to have a vision about where you want to take your life. Here’s one more line from the song: "We've let so many dreams just slip through our hands. …"

Don't let your financial dreams slip through your hands.