Understanding the Six Ws of Financial Planning

By: Michael Hudock

As we say farewell to an old year and begin greeting a new one, you’re probably thinking about various goals you want to accomplish or experiences you want to have in 2026.  At the same time, you may be asking yourself questions like:

Is this possible?

Can I afford it? 

What will it take to make that happen? 

It’s not always easy to figure out the answers to those questions.  Which is why so many people, around this time of year, ask themselves something else:

Do I need a financial plan? 

If you’ve ever spoken with a financial professional, done some research online, or even just seen ads on TV, you’ve probably come across the term “financial plan” before and wondered whether you needed one.   But what is a financial plan meant to do, exactly?  That’s a question most websites, ads, and even books don’t often address.  The answer is usually just assumed to be self-evident.  And if you can find an answer, it’s usually some variation on the following:

A financial plan coordinates every aspect of your finances, including your taxes, investments, cash flow, Social Security, debt, and more.

That doesn’t really tell us much, does it? 

Now, your investment portfolio, taxes, and cash flow are all incredibly important.  In fact, you’ll find those same terms all through our website, because here at Hudock Capital, we spend our days thinking about those things so that our clients don’t have to! 

But while a financial plan certainly covers all those items, it doesn’t really explain what a financial plan actually does or why it’s so important to have one.  That’s because, at the end of the day, finance is a means to an end, not an end in itself. 

After all, nobody looks back on their life and thinks, “Well, I didn’t get to do most of the things I wanted, but at least I got my taxes in order.” 

To illustrate what a financial plan is actually for, let me tell you two stories. 

The first is about a client of ours whom I’ll call Cathy.  Cathy was in her early sixties when she came to me with an issue.  Her own daughter was about to have a baby.  It would be Cathy’s first grandchild!  But as excited as she was, Cathy was also worried.  She knew her daughter was going to need a lot of help raising the child — not just financially, but physically and emotionally, too. 

What Cathy wanted more than anything was to be there for her daughter.  To run errands, cook meals, change diapers, and babysit as much as possible so her daughter could get some much-needed sleep, or go back to work and earn much-needed money.  To be present for all the big and little moments, each one precious in its own way.    

The trouble was that Cathy was still a few years away from her planned retirement date.  Leaving her job to be a full-time grandmother simply wasn’t an option, as it would have negatively affected her retirement savings, her Social Security benefits, and much more. 

So, what was Cathy to do?  Just accept that her options were imperfect, and choose the “least bad” one? 

No!  Because this is what having a financial plan is all about. 

When Cathy explained to me both what she wanted and what she needed, we set about creating a plan for making it happen.  Since what she wanted was time — time to be there for her daughter and granddaughter — it was obvious that she needed to work less.  But since she couldn’t just retire, that meant switching from a full-time job to a part-time one. 

So far, so good.  But a part-time job means a smaller paycheck.  So, we calculated how much a part-time job would affect her cash flow, and thus her ability to save…which in turn would affect her investments, her taxes, and when she would actually be able to retire.  (In other words, we covered most of the terms I mentioned earlier in this article.)  From there, we were able to lay out a step-by-step plan for:

• How much she needed to save each month
• What percentage of those savings should be invested for the long-term
• How much of her paycheck should be allocated to her company retirement plan
• When to start taking Social Security and Medicare benefits
• How long she would need to continue working before her new retirement date

The result?  Cathy was able to be there for her grandchild’s first tooth, first step, and first word.  For the sleepless nights, diaper changes, and trips to the doctor’s office…and for all the smiles and giggles in between.  The big moments and the little moments.  Each one precious in its own way. 

And guess what?  She was still able to retire afterwards. 

That was Cathy’s story.  Now let me tell you Hank’s. 

Hank was a man of incredible work ethic and discipline.  The former helped him earn a lot of money.  The latter helped him save a lot of money. 

But Hank was also a man who never bothered to create a financial plan. 

Because Hank earned so much, and saved so much, he didn’t think he needed one.  Instead, he focused on one thing, and one thing only: Getting more.  He was constantly on the lookout for ways to be thrifty.  To save a dollar here, a few cents there.  Nobody could fault him for that, of course, but the problem was, all the money he earned just sat there.  Because he didn’t have a financial plan, he didn’t really know how much he had.  It was just a number to him — a number that seemed perpetually lower than it could have been.  A number that was always less than “more.” 

Despite his wealth, Hank always thought in terms of nickels instead of dimes…and as a result, never enjoyed a penny. 

When Hank passed away, he had done almost none of the things he’d dreamed of doing…and he left an enormous pile of assets behind that had never done him any good.  He was so worried about constantly earning more money that he never realized he already had plenty.  Why? 

Because he never had a plan. 

***

So: A financial plan is not about budgets and taxes, wills and trusts, insurance and investments.  It includes and addresses those things, but it’s not about those things.

What is it about? 

To me, a financial plan is really about something I call “the Six Ws of Your Financial Future.”   

Did you ever learn the six “W” questions when you were in school?  They are as follows:

Who?

What?

When?

Where?

Why?

How?

For decades, journalists, investigators, scholars, and even military commanders have used these questions to gather information and formulate plans.  They also perfectly encapsulate what financial planning is really all about: Charting a course from the present to a future where you can do what you want, when you want, and where you want…with who you want.

The result?  A lifestyle all built around your purpose, your values, and your dreams.  A lifestyle, in other words, that helps you achieve your personal “why.” 

Why you get out of bed in the morning.  Why you work as hard as you do.  Why you care about the people and causes that matter most to you.  Why you are here, on this planet, in this place, at this time. 

This is what a financial plan is truly all about.  It’s about determining your who, what, when, where, and why…and then figuring out how to make it all happen.  Everything else — your investments, your taxes, your estate planning, your cash flow — are all just stepping stones to the six Ws.   

So, with all of the above in mind, we can finally answer the question: “What does a financial plan do?” 

Here’s how I like to think of it:

A financial plan gives you the time and means to focus more on the precious moments in your life.

It really is that simple…and that powerful. 

Now, whether you need one?  That’s a question only you can answer.  But as we enter a New Year, and you ponder what you want your future to look like, ask yourself:

Are my finances aligned with my six Ws? 

Am I getting closer to doing what I want, when I want, where I want, with who I want? 

Do I know how to get closer? 

Does my lifestyle match my own personal why? 

And most of all:

Am I focusing enough on life’s most precious moments? 

If the answer to any of these questions is “No,” then the question, “Do I need a financial plan” is simple:

Yes. 

Please let us know if we can ever be of assistance. 

Sincerely,

Michael Hudock