If you ask ten different people what financial planning is, you may very well get ten different answers. That’s because financial planning is very complex and covers many diverse areas. From my 29 years of experience here are 12 different areas of financial planning I personally see on a daily basis that need addressing. I would invite you to look up the scriptures I’ve included to see how God’s word covers so many of these issues. Jesus spoke on stewardship more than any other topic. All financial decisions are spiritual decisions and should be prayed about and aligned with scriptural principles before implemented.
Jeremiah 29:11 (NIV)
For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.
- Retirement income planning using 401k’s, defined contribution plans (different types of IRA’s) and benefit plans – Ecclesiastes 3 (There is a time for everything)
- Income tax strategies and planning for those in high income tax brackets – Luke 20:25, Romans 13:1-3,7
- Setting up for Efficient Wealth transfer (Estate Planning) using wills, trusts, and family limited partnerships – Proverbs 20:21
- Fee-Based Investment advice for efficient diversification – Ecclesiastes 11:2, Proverbs 13:11
- Charitable giving and funding worthy causes using cash and non-cash assets; setting up family foundations, Charitable Trust, Donor Advised Funds – 2 Corinthians 9:6-7
- Setting accumulation goals for the families’ different needs, wants and causes – Proverbs 16:3, 9
- Advance business continuation planning for unexpected life events, business partner buyouts upon retirement
- Funding for the children’s, grandchildren’s and families’ physical needs, such as medical, food, clothing, shelter and wants – 1 Timothy 5:8
- Educational planning for the family, 529 plans, childrens trust, Uniform Gifts to Minors Act (UGMA) – Proverbs 22:6
- Insurance and risk management planning for asset protection, including premature death or disability, slip and fall, potential lawsuit
- Accounting and monthly bookkeeping services for both personal and business expenses – Proverbs 27:23-24
- Heritage planning to assure the values, dreams, and aspirations are being passed down from one generation to the next along with the financial inheritance. If this is not done 90% of wealth is gone in 3 generations or less on average. – Ecclesiastes 7:11-12
There are also many other areas to be covered in financial planning such as budgeting, debt elimination and setting up a strategy for building cash reserves (Proverbs 21:20 and 22:7). It is hard for many financial planners to give council in this area since they must be paid for their time and very limited resources may be available.
I believe no financial decisions should be completely independent of each other, and for Christians, all financial decisions are spiritual decisions that should be prayed about before implementing. Next week, I will continue to speak on financial planning with the 5 steps you should follow when deciding your financial future, no matter what stage life you are in.