Is a Written Financial Plan Necessary?


Managing finances is an important aspect of the life of every working individual and to ensure that one is able to lead a life free from worries, it is important that it is done properly in a planned manner.

I used to interact with many young professionals who come to us for personal financial planning. During the discussion, I have explained them about written financial plan, income-expenditure, budget, resources, financial goals, risk, investment time horizon, investment discipline, debt trap, equity market, strategy etc.

As a CERTIFIED FINANCIAL PLANNERCM, I used to prepare ‘Comprehensive Financial Plan’ which is a 60-70+ pages written report for my clients. My services are oriented toward developing written strategic financial plans for solving specific problems and/or reaching specific goals depending on family or business needs.

I keep sharing some real life instance about financial planning and why I prepare ‘written comprehensive financial plan’ for my clients.

Written Financial Plan?

Yes, it is a written ‘comprehensive financial plan’.

Initially, it will take 2-3 hours for data gathering and goal setting.

It is a 60-70+ pages written ‘comprehensive financial plan’. A financial planner will take minimum 25-30 hours to prepare the comprehensive financial plan.

Plan presentation day, it will take 4-5 hours discussion with the family about the plan and strategy.

Recently one of my customers asked me why they needed a written plan if they were getting all the advice they needed from friends and relatives.

Is a Written Financial Plan Necessary?

I want to provide an answer for this through page, as to why you need a written financial plan, through a simple way.

Business owners have written business plans.

Ship Captains chart their courses on maritime maps.

Doctors have written treatment plans for their patients.

What these professionals all have in common is that they have written plans of action that provide them with goals and direction to a defined outcome.

Think of the similarities between a written comprehensive financial plan and a course charted on a maritime map. Both have a starting point and a destination, both have waypoints and contingencies for emergencies and both will allow for a change in course should some unforeseen circumstance or opportunity present itself. No competent, trustworthy Captain would undertake a major voyage without first having a plan.

The same should be said about our own financial journey and as the business owners of our financial future, we should plan for our financial success in a clear and definitive written financial plan.

A written comprehensive financial plan should consist of the following:

∼ Goals and Objectives                                            ∼ Tax Analysis & Planning

∼ Net Worth Statement                                           ∼ Estate Planning

∼ Defined Assumptions                                           ∼ Retirement Planning & Income Planning

∼ Cash Flow Summary                                             ∼ Investment Planning

∼Cash Flow Analysis                                                 ∼ Plan Recommendation & Implementation

∼ Risk Management Analysis                                   ∼ Review Dates

Often spouses assume that they share similar financial goals and objectives, but they never take the time to discuss it. Going through the process of drafting a comprehensive financial plan brings these issues to the forefront and gives you an opportunity to discuss them and come to a common understanding.

Imagine approaching retirement, thinking that you’ll sell your home and move to your village, while your wife is looking forward to staying in your current home and spending more time travelling India in the winter. This could pose a major obstacle, which you can deal with well in advance of the actual retirement date to ensure a positive outcome for all.

Although it’s hard to imagine, many people spend more time planning their summer vacation than they do planning their financial future.

Like the Captain, who continuously reviews his position on the maritime chart, assesses the potential risks and re-plots his course accordingly, you should also review your comprehensive financial plan and assess where you are and what risks lie ahead then make the necessary adjustments in your plan to stay on track to achieve your goals and objectives.

[blockquote style=”1″]“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”  -Abraham Lincoln[/blockquote]

7 Reasons Why You Need a Written Financial Plan

This is why I believe every investor should take the time to create a written comprehensive financial plan document. There are at least seven reasons why I believe this is important:

1) A written financial plan will help you clarify your most important priorities.

2) A written financial plan will enable you to maintain balance.

3) A written financial plan will provide a filter by which you can say “no” to lesser things.

4) A written financial plan will empower you to identify and address your current realities.

5) A written financial plan will equip you to imagine a better future.

6) A written financial plan will serve as a road map for achieving what matters most.

7) A written financial plan will help ensure that you don’t finish life with regrets.

As per my opinion “Having a comprehensive financial plan with the guidance of a CERTIFIED FINANCIAL PLANNERCM professional can provide a road map towards greater financial and emotional well-being. I urge Indians to take control of their finances by talking to a CFP professional about their goals and financial planning needs.”

Hiring the right professional can make the difference between a successful journey and one fraught with disappointment, and sometimes disaster. A Planner who carries the CERTIFIED FINANCIAL PLANNERCM designation has achieved and maintains internationally recognized standards of knowledge, skills, abilities and ethics. Working with a CFP provides assurance that you’ve hired a qualified professional who will put your needs above their own to ensure you have a plan to achieve your goals and objectives and assist you with re-plotting your course when necessary.


I am a CERTIFIED FINANCIAL PLANNERCM. For the moment, I have shared my experience growing up with you because it had a tremendous impact on how I do what I do.

If you have a question about your own financial situation please connect with me..  I’d be delighted to try to be of service.

Want to become a Crorepati with nominal income? Read it.

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