Tax Guide

 Search  2024 Tax Guide  Tax Tools
 Tax Calendar  Tax Glossary

< Previous Page Next Page >

Monitoring Your Plan

Nothing lasts forever--certainly not a personal financial plan. Once you have invested the time, effort, and money needed to implement your financial plan, you definitely don't want changed circumstances to make your plan obsolete.

Many events can happen that may make it advisable for you to change one or more parts of your personal financial plan. When you are confronted with such a change in circumstances, the first rule is: Don't panic! It's quite likely that some, if not most, of your plan will still be OK. We don't say this to lull you into a false sense of security, but so you're not so discouraged that ignore the change and hope that it doesn't have an adverse effect on your plan. Nevertheless, you'll need to carefully review all portions of the plan to see if they still represent what you want, what you need, and how to get there.

Tip

Tip

Remember, as bad as living with an outdated plan is, dying with an outdated plan may be worse, since your family may no longer be able to correct the problem.


In deciding whether your personal financial plan needs to be updated to reflect changed circumstances, you'll have to consider two categories of changes: those that have a direct monetary impact and those that do not. We'll discuss each.

Changes having a direct monetary effect. Some changes will have a direct and immediate monetary effect on your financial plan. Such changes include:

You have to expect that any of the first three items will change somewhat over time. When we talk about changed circumstances within the context of amending your financial plan, we mean changes that are large enough to potentially affect your getting to your goal, or not. To determine whether the changes are this large, we suggest that you take a look at our discussion of planning to reach your goals.

Changes having an indirect monetary effect. In addition to those changes that have a direct monetary affect on your financial plan, there are changes that affect your financial plan less directly.

These indirect effect changes may be just as important as the direct changes, but with the added complication that you may be less likely to think about their connection to the financial planning that you have done. After all, if the cost of your goal itself goes up, once you discover this you'll know that your plan should be checked to see if you need to modify the plan in some way. But more indirect changes, like the following, may escape your attention:

Tip

Tip

Change is neither bad nor good....it's simply inevitable. Plan on it! And plan for it!


< Previous Page Next Page >

© 2024 Wolters Kluwer. All Rights Reserved.