What is financial planning?

woman planning
OCCU  -  05.19.2021

It sounds a bit dry. Daunting, even. Like something that involves a lot of number crunching and specialized knowledge.

But financial planning isn’t what you think it is.

When you boil it down, it’s really about nurturing your financial wellness and building a stable foundation for your future growth. True, there is some number crunching involved—that’s what we’re here for. As an OCCU member, you have our entire Investment Services Team and their expert financial planning knowledge at your side. You provide the goals and vision, and we’ll guide you through the daunting stuff.

Financial planning isn’t just for people who make a lot of money or want to get rich. Financial wellness is important for everyone, and financial planning can help steer you toward making healthier decisions about money. It can also build up your resilience to life’s storms and position you to take on exciting opportunities when they arise.


The 4 pillars of financial wellness

Certain behaviors—think exercising daily, eating a balanced diet and getting plenty of sleep—are fundamental to a healthy lifestyle. Financial wellness has its own set of guiding principles, which set up the cornerstones of your financial plan.

1. Think long-term.

Safe drivers don’t just watch the road directly in front of them. They focus their view as far ahead as possible so they can see what’s coming and react more effectively. A similar principle applies to financial planning. Taking a long-term perspective helps you make better financial decisions, so it’s important to set goals for the distant future as well as the near future.

2. Spend less than you earn.

It sounds obvious, but the ready availability of credit makes it easy to overspend without realizing it. Over time, spending more than you earn will land you in debt. Spending as much as you earn might get the bills paid, but it won’t help you out in an emergency. Spending less than you earn is the only way to build wealth, save up for your goals, and prepare for life’s curve balls.

3. Maintain liquidity.

Financial liquidity means you have money available to cover unexpected expenses. No matter how much or how little money you have, everyone needs an emergency fund that’s readily accessible. Liquidity isn’t just about preparing for setbacks; it’s also about having money available to take advantage of great opportunities that come your way.

4. Minimize debt.

A certain amount of debt is necessary for building credit, which is a useful tool for achieving your financial goals. Overall, debt costs money to maintain, and over time it can take away your wealth. Use it sparingly, strategically and carefully.

Partnering with a financial planner

Now that you’re familiar with the pillars of financial planning, our Investment Services Team can work with you to develop a plan. Don’t worry about the technical stuff; we’ll guide you through that. Your vision for the future and desire for financial wellness is all you need to get started.

At OCCU, we believe in being the financial partner who can help you achieve your financial goals at every stage of life. Connect with our team of experts to get started with financial planning today.