Build a Better Financial Plan with Mind Mapping

One of the hardest parts of creating a financial plan is managing all the moving parts and how they are related to each other. It can be overwhelming for those familiar with finance, so it is much more difficult for those who are not financially trained or the ones who don't even like finance.

It's important for people doing financial planning get a real understanding of how all the parts are interrelated. This way they won't sabotage their financial future by taking a negative action where they thought it wouldn't impact their money—like going sky diving without having a will. How do you go about grasping the complete plan? One great way to do this is to use a mind map. (See also: 4 Reasons Why Financial Plans Go Wrong.)

Mind mapping is a visual diagram that helps you organize and gather information. It's great for brainstorming and helping keep related information together. Mind mapping was popularized by Tony Buzan in the late 1960s but has been around for centuries under different names. Ultimately, what it does is help you use all parts of your brain to process, understand and think about information. The visual component of it helps you find clarity the issues, find associations you did not think about and uncover areas you may have forgotten. Additionally, it can help people of all learning types understand the information being discussed because it utilizes visualization, spoken word and touch. 

Courtesy, UsingMindMaps.com

Because of the complex connections of all aspects of financial planning, mind maps have the potential to help all of your clients understand what you are talking about and what they are working toward.

Today there are two ways to create a mind map: with pen and paper or with a software program. The written version may create more work for you on the back end when moving it to an electronic format, but the paper is beneficial for clients as writing engages parts of the brain that you do not access when using a computer.

To start, write your name in the middle of the paper and draw a circle around it. From the name, draw wavy lines that reach out to different aspects of a financial plan, like an estate plan, family members, investments, risk management and unexpected events. (See also: Top Finance Tips for Clients in Their 30s, 40s.)

Next, fill in the components of each of these areas by drawing another line from the main idea. For example, off of "unexpected events" you may have death, disability and unemployment. Continue breaking down each of these areas until you are out of ideas. So, you may take "death" and have more lines off of it that say "insurance," "will," and "funeral planning." 

As you find ideas that are related to each other, you might want to connect them with a dotted line so you can see the relationship. For example, if you have a family section that lists children, you could draw a line from each child's name to their area of the mind map for "college funding."

To improve the clarity of the map and the ability to make connections, you can add colors and images. You can make each branch a different color or add images to items such as "buy a boat." Many people are visually oriented and are motivated more by the image than the actual words.

Mind-mapping software can be found online. They include Mindjet's MindManager, as well as MindGenius and MindMeister.

Once you have completed the mind map, it's time to make it a living document. (See also: Retirement's Changing Tide: How to Help Clients.)

There are many software programs that will allow you to create electronic mind maps and then use them to improve your service and efficiency. Here are some ideas on how to use them to better the financial planning process.

• Add documents: You can attach documents such as a will to the line for wills. With the ability to add these documents, you can quickly access them when a question comes up—it's in an easy place to find.
• Quickly add new areas of the plan: As your life changes over the year, you can update the map. The mind map becomes a working document that evolves. Then when the time comes in for a yearly review, you can simply print the updated map and do a quick review instead of recreating the process from scratch.
• Management purposes: You can also incorporate mind maps into other areas. Examples include brainstorming during meetings and organizing presentations.

Mind maps are a great way to organize goals and information in one central spot. Taking the time to create one—and go through the mapping process—will improve your efficiency and ultimately help you reach goals faster. (See also: How to Avoid the Inheritance No One Wants: Debt.)