Plan For Life

The Top 5 Benefits Of Having A Financial Plan

How a financial plan can put you ahead on all your goals.

July 06, 2016 • 5 minute read
BrightPlan Blog

Ever been curious about how much money you’ll earn over the course of your lifetime?

The United States Census Bureau estimates that the average American’s lifetime earnings will be $1.2 million if they’ve attained a high school diploma; $2.1 million with a bachelor’s degree; and $4.4 million if they’ve earned a professional degree. Amazing, right?

But here’s the rub: Recent statistics show that the savings rate hovers around 5%, and nearly half of Americans aren’t prepared to cover an expense of $400 without going into debt or selling something. Clearly there's a disconnect between what we earn and what we keep.

Having a Financial Plan Matters

The good news is, a 2012 study by the CFP Board (the nonprofit that develops standards for and credentials Certified Financial Planners™)  found that “the more extensively households plan, the better prepared they are financially in terms of their likelihood of saving, investing, and managing credit card debt.”

The Board also discovered that 30% of American households are “comprehensive planners,” with strategies for savings and investments, planning for retirement, education, emergencies, major purchases, and insurance needs.

Much of this can be automated, so don’t worry about financial planning becoming a full-time job. Below are five key benefits to having a plan for your finances.

1. A Financial Plan Can Accelerate Savings

While the national savings average is around 5%, the CFP Board found that over half of planners reported saving at least 10% of their income. Planners can then put these dollars to work, with nearly twice as many reporting at least $100,000 in investments than non-planners.

2. A Financial Plan Instills Confidence

The study found that while only 30% of nonplanners feel very confident about reaching financial goals, 52% of planners can claim this confidence.

That’s because comprehensive planners know exactly where their money is going each month. By taking the mystery out of money, they set themselves up to experience more financial confidence.

3. A Financial Plan Gives Peace of Mind

Imagine the peace of mind that comes with knowing  you can cover your monthly expenses, set aside money for long-term goals, and dip into a pile of cash in your wallet for a few guilt-free splurges. Even if that feels out of reach for you now, a plan can propel you in the right direction.

4. A Financial Plan Can Help You Live Comfortably

One key to enjoying life is finding contentment. A personalized financial plan helps you focus on making the most of what you have, rather than bumming out about what you don’t.

Focusing on the options your income creates instead of the limitations of your financial situation could lead to greater contentment.  The CFP Board found that 48% of planners described themselves as “living comfortably” -- over double the amount of nonplanners.

5. A Financial Plan Can Help You Reach Your Goals

Money has wings. A paycheck hardly settles in an account before it flies away to one obligation or another. Reaching financial goals involves clipping those wings so money sticks around a little longer.

Having a spending, saving, and investing plan in place helps you to keep your hard-earned cash and transforms dreams from nebulous wishes into actionable goals. By gaining a holistic view of your finances, you can get and stay on track toward reaching all of your financial goals.


1) The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings, U.S. Census Bureau. 2002.

2) Household Financial Planning Survey, CFP™ Board of Standards. 2012.

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