Start with a vision of what you want your future to look like. Then break through the noise, set goals, create a plan, and set it in motion.

Personal finance

When It Comes to Financial Planning, Take the Long View on Life

  • Jenna Faust
  • 12/19/2017

Investors get information thrown at them from all angles ― the internet, newspapers, podcasts, media personalities like Mad Money man Jim Cramer ― you name it. It gets harder all the time to ignore the “noise” that unconsciously directs our attention to things that aren’t important or things that are out of our control.

Is the market headed for a correction? When will interest rates rise? Will tax reform pass? These topics are completely out of our control, yet many of us spend time thinking (and ultimately stressing) about their outcomes. While all of this is happening, we might overlook other important areas of life that we value, such as family, friends, health, and life experiences.

Everyone has limited time and energy, so why not consider shifting your focus to things you can control ― like how much you’re investing and the appropriate asset allocation. Implementing this philosophy into your financial plan can have a significant impact on your ultimate financial success and overall happiness.

Identify your goals

The first step in this process is to identify your goals. Top athletes, successful business people, and leaders across all fields set goals. It’s no different when it comes to your personal finances. At the heart of a financial plan are the goals you set out to achieve ― everyone should start somewhere and shoot for something. Chances are you’ll have to course-correct at some point in the future, and that’s okay. Going through the exercise of setting goals gives you a long-term vision and short-term motivation.

Start by brainstorming what it is you want to accomplish in life. Do you want to buy a home? Start your own business, or sell your business and retire? Travel around the world? Leave a legacy to your family in a tax-efficient manner? Goals differ from one person to the next, which is why no two financial plans are the same. You can take it a step further and prioritize your goals into needs, wants, and wishes, and establish a timeline for each. Starting the conversation here will set the stage for your current and future financial decisions.

Building your customized plan

Once your initial goals are defined, you’ll need to build a comprehensive financial plan to help you reach them. The objective is to provide you with the best long-term odds of financial success while minimizing risk.

A truly holistic planning approach will consider all aspects of your financial life ― including investments, budgeting, education planning, risk management, tax planning, estate planning, and retirement planning, among other areas.

While analyzing your plan, it comes down to one simple question ― will you be able reach all of your goals? If not, consider additional scenarios where one or two variables are changed (e.g., retirement date, savings amount, asset allocation, etc.). This is where prioritizing your goals comes into play. You may be willing to retire later if it means your higher priority goal like saving for your child’s education or a home remodeling project would be achievable. Sticking to an agreed-upon strategy is not always easy ― it takes discipline, dedication, and likely, a little sacrifice along the way.

It’s a process, not a one-time event

It’s important to track your progress and adjust your goals as life priorities change. Financial planning isn’t a one-time event ― new opportunities, unanticipated circumstances, and volatile markets may prompt changes to your plan. That’s why it’s a good idea to review your plan at least annually, and when something significant happens in your life.

We can help you define success

No matter what stage of life you are in, you are never too young or too old to start the financial planning process. Having a clear understanding of your goals and values can make it easier to stay focused on the things that matter the most to you. Take the time to set financial goals, think big, and get inspired. CLA is here to help you at every step of the process with objective advice and a personal connection to people committed to your success.

  • Jenna Faust
  • Senior Wealth Advisor
  • CliftonLarsonAllen Wealth Advisors, LLC