By Wesley Howard Triani

A financial plan is like a roadmap—it guides you toward your goals and helps you navigate life’s financial twists and turns. But even the best-laid plans need to be revisited and adjusted from time to time. Life is unpredictable, and changes in circumstances, markets, or personal goals can throw your plan off course. That’s why regularly reviewing your financial plan is not just important—it’s essential.

Over my 43 years in financial planning, I’ve seen how small, strategic adjustments can make a significant impact on a person’s financial future. Whether it’s updating your budget, tweaking your investments, or rethinking your retirement goals, these changes ensure your plan remains relevant and effective. Let’s dive into why reviewing your financial plan matters and how even minor adjustments can lead to big results.

Why Reviewing Your Financial Plan Matters

When you first create a financial plan, it reflects your goals, income, and priorities at that moment in time. But life doesn’t stand still. Job changes, family growth, health issues, and market fluctuations can all affect your financial outlook. If your plan isn’t updated to reflect these changes, you risk falling behind on your goals or making decisions based on outdated information.

Think of it like maintaining a car: you wouldn’t expect it to run smoothly for years without regular checkups and adjustments. Your financial plan is no different. Regular reviews allow you to identify what’s working, what isn’t, and what needs to change to keep you on track.

The Benefits of Small Adjustments

One of the most common misconceptions about financial planning is that only big changes—like getting a new job or receiving an inheritance—require you to revisit your plan. The truth is, small adjustments can have a profound impact over time.

For example:

• Increasing your retirement contributions by just 1% annually can significantly boost your savings over the long term, thanks to the power of compound growth.
• Reallocating your investment portfolio to match your changing risk tolerance can help you weather market volatility while still meeting your goals.
• Adjusting your budget to eliminate unnecessary expenses can free up money to pay down debt or build your emergency fund.

These small changes may seem minor in the moment, but their cumulative effect can be substantial.

When to Review Your Financial Plan

While it’s a good idea to review your financial plan at least once a year, there are certain life events or milestones that should prompt an immediate review:

• Major life changes: Getting married, having a child, or experiencing a divorce.
• Career shifts: Starting a new job, earning a promotion, or retiring.
• Health events: Facing a significant medical expense or a change in health status.
• Market conditions: Experiencing a major market downturn or boom.

By proactively reviewing your plan during these times, you can make adjustments that keep you on track toward your financial goals.

Key Areas to Focus On During a Review

When reviewing your financial plan, it’s important to evaluate all aspects of your finances. Here are some key areas to focus on:

Budget and Cash Flow

Start by looking at your income and expenses. Has your income changed since your last review? Are there new expenses you need to account for, or opportunities to cut back on discretionary spending? Keeping your budget up to date ensures that you’re making the most of your resources.

Retirement Savings

Are you on track to meet your retirement goals? If not, consider increasing your contributions to your 401(k), IRA, or other retirement accounts. Small adjustments now can make a big difference later, especially when you take advantage of employer matches and catch-up contributions if you’re over 50.

Investment Portfolio

Your investment portfolio should align with your risk tolerance, time horizon, and financial goals. As you get closer to retirement, you may want to shift to a more conservative allocation to preserve your savings. Conversely, if you have decades to go before retiring, you might increase your exposure to growth-oriented investments.

Insurance Coverage

Life insurance, health insurance, disability insurance and long term care insurance are all critical components of a comprehensive financial plan. Make sure your coverage still meets your needs, especially if your family situation or income has changed.

Estate Planning

Review your will, trusts, and beneficiary designations to ensure they reflect your current wishes. Life changes, such as the birth of a child or the death of a loved one, may require updates to your estate plan.

Debt Management

Evaluate your debt repayment strategy to see if adjustments are needed. For example, if you’ve recently received a raise, you might use the extra income to pay down high-interest debt faster.

The Role of Professional Guidance

While reviewing your financial plan is something you can do on your own, working with a financial planner or advisor can provide valuable insights and expertise. A professional can help you identify opportunities for improvement, avoid common pitfalls, and stay focused on your long-term goals.

For example, they can:

• Analyze how market changes might impact your investments.
• Help you navigate complex decisions, such as when to start claiming Social Security benefits.
• Provide personalized advice based on your unique circumstances.

Just remember to consult with your financial advisor, accountant, or attorney when making decisions in areas that require specialized knowledge, such as taxes, legal matters, or investment strategies.

Final Thoughts

Reviewing your financial plan isn’t just about checking boxes—it’s about taking control of your financial future. By regularly assessing your goals, budget, investments, and other key areas, you can make small but impactful adjustments that keep you on the path to success.

Remember, life is full of surprises, and your financial plan should evolve to reflect your changing needs and priorities. Whether it’s reallocating your investments, updating your estate plan, or simply increasing your retirement contributions, these changes may seem small today but can lead to big rewards in the future.

If you’re feeling unsure about where to start, don’t hesitate to reach out to a financial professional for guidance. Together, you can ensure your financial plan remains as dynamic and adaptable as your life. After all, the best financial plans are those that grow with you.