What Do Opportunity Costs Have to Do with Your Financial Plan?

Every time you make a decision in life, you’re choosing to say “yes” to one thing and “no” to all the other options available to you. That’s known as opportunity cost. There’s an opportunity cost with how you structure your financial and estate plan, too! With limited resources, you have to make judgment calls about what you do and who gets what.

A comprehensive financial and estate plan includes many different components, including cash flow management, insurance, long term care considerations, retirement and investments. Unfortunately, there are many different concepts in this process that can get overlooked.

Recognizing the value of opportunity costs and understanding how these factor into making your various decisions is extremely important. Every dollar that is not being effectively used in your individual financial plan could have been used in another way to advance progress in that respect. For example, a dollar that is not being put to effective use could have assisted with debt reduction.

These lost opportunities represent the opportunity cost of failing to maximize the impact of each individual component of your estate plan. There are areas within your estate and financial life that could be showing inefficiencies and this opportunity cost could end up making things more difficult for you in the future or for the beneficiaries that you wish to pass on your assets to. 

Scheduling a consultation with a trusted estate planning lawyer is often the first step in recognizing these opportunity costs and doing everything possible to redirect funds to the right place. For more information about aligning this with your individual estate plan, set up a time today to speak with a trusted attorney.     

 

 

Yes, You Still Need a Financial Plan Even After a Pandemic

There is no doubt that the year 2020 has been unpredictable across the board, including financially. This makes many people hesitant to update their plans or to establish a new planning strategy altogether. However, a financial plan and an estate plan are some of the most important things you can work on even if you only develop a framework that needs to be amended later.

Despite all of the uncertainty around you, planning could be a good way to address any of the anxieties or nerves you have around the situation. This is a perfect opportunity to step back and reassess where you are right now. Do you already have some documents in place but they might be outdated? Perfect. That’s the first step, but you’ll likely need to make sure they still reflect what’s most important to you and what you currently own. That could require some outside support.

Now is the time to speak with an experienced estate planning attorney to revise those and ensure they are in line with your needs. Some of the initial questions might even prompt you to think about new ways to develop your financial plan.

Did someone take a salary cut, lose their job or is worried about losing their job as a result of the pandemic? Go back to revisiting your emergency fund and thinking about how much you contribute to your retirement.

If you haven’t reevaluated your budget recently, now is also a good time to re-strategize and reevaluate that. For more information about how you can be successful with your financial plan and your estate planning goals, schedule a consultation with a trusted estate planning lawyer today.