The Beginner’s Guide to Financial Planning

Jack Coakley

October 3, 2019

Looking to get your finances under control but don’t know where to start? We sat down with Skylight Partner and Financial Planner Ryan McKean and compiled the ultimate beginner’s roadmap to financial planning—covering everything from fundamentals to finding the right planner and firm for your needs.

What exactly is financial planning?

At its core, it is a lifelong process that can help someone properly allocate their finances so they can be prepared for the expected and unexpected moments in life. “Think of it as having a go-to guide whenever a financial thought crosses your mind: Am I saving enough for my retirement? Will I be able to afford to send my children to college? All these scenarios and more are questions we address for our clients” said Ryan. To put it simply—it is a way to plan for the future so you can enjoy your life in the present.

Once a client has identified their goals, financial planners like Ryan start building out a strategy for them, based on six key areas.

The six key areas of financial planning

Partner & Financial Planner Ryan McKean

Financial Position: Taking a pulse on your current financial standing

“This area is about getting an initial picture of where the client is at—covering things like cashflow and monthly budget. A person might think they already have an accurate understanding of this in their head, but once they see their budget on paper it can really help see it with new eyes” says Ryan.

Adequate Protection: Being equipped to handle any or all “what ifs”

“This area is focused on the unforeseen rainy days in life ranging from bad to catastrophic. Will I be able to pay off my debt? What if I get injured and cannot work? How can I provide for my family in case of an untimely death? Building a strategy to protect you and your family from these scenarios gives allows you to plan for the future with a sense of confidence.”

Wealth Accumulation Strategies: Planning for the big price tags of life

“Whether you are looking to put your children through college or buy a vacation home, a financial planner will coach you on how to properly create and maintain an optimal cash reserve.”

Retirement Planning: Your exit from the workforce

“Most people believe this just covers personal savings and investments, but financial planners will also help you make the most of government and employee benefit plans.”

Tax Reduction: A strategy for Uncle Sam

“At its core, this is all about creating a game plan that minimizes long term income taxes and tax liabilities.”

Estate Planning: Protecting your legacy

“To put it simply, estate planning helps create a future for the people you care about after you’re gone. With the support of a financial planner, you can determine your exposure to estate and inheritance taxes and outline appropriate estate planning methods.”

Is financial planning right for me? Where do I start?

There’s a big glaring myth that financial planning is only for the ultra-wealthy, which is simply not true. “I hear this a lot; my first response is usually that the people that are wealthy did some sort of planning to help maximize their wealth” says Ryan. The fact of the matter is that there is always something you can do to take steps towards a better future, regardless of income level.

When it comes to choosing a firm or advisor suited to your needs, doing your research is vital. “You should look for two major qualities in a financial planner: experience and trust” said Ryan. Online resources like BrokerCheck by FINRA allow users to look up individual agents to confirm industry experience, certifications, and the history of their practice.

In order to be the “go-to guy” for each of his clients, Ryan and other planners focus keenly on building a relationship of trust. “To properly take a holistic approach to someone finances, it’s imperative that we foster an open dialog with clearly stated goals. Without trust between both parties, this cannot be done.”

Thanks for speaking with us Ryan! Interested in learning more? Speak with a planner at Skylight today.