“A man without a purpose is like a ship without a rudder—never likely to reach home port.”
Although the 18th century writer and historian Thomas S. Monson may not have been thinking about the current state of your personal financial planning goals, his words still ring true for many of us today.
And whether you want to run your first marathon, buy your first home, or save for your retirement, goals help to give you direction, motivation, and purpose. Goals can also help us to put structures around the visions we have for the future and allow us to break up our larger hopes into actionable short-term steps.
The same principles and benefits of goal-setting apply during the process of creating a financial plan. So whether you are just beginning your financial planning journey and need a kick start or you’ve been on your path for some time and need a refresh, here are five benefits of utilizing goals-based personal financial planning that you can use.
1. Keeps You Focused
Saving money for your future, your priorities, and your plans is hard work—no one is going to deny that. Especially if you are constantly faced with ads for new products or feel the urge to keep up with the Joneses.
That’s where goal-based personal financial planning comes in: It gives you tangible alternatives that you can focus on to balance out those desires that, in the long run, may not be as important to you as achieving your personal financial goals.
2. Helps You Communicate Your Vision and Values
Every community has its own traditions and routines. Whether it is as simple as wearing the same jerseys for the game on Sunday or as special as getting the whole family together around the holidays, these actions have meaning. At the same time, investing time, money, and energy into these activities demonstrates that they are important to you.
Taking the time to document and share your financial goals with your family members can have the same effect. You can build a team around you that shares the same goals and values, motivating you to keep moving forward even when things don’t go as planned—and, of course, cheering for you when you achieve your goals.
3. Prepares You for the Unexpected
Much wisdom has been shared about the value of planning ahead. Ultimately, the most important part is the practice of thinking through different scenarios and how you would prepare for and react to them.
Goals-based financial planning makes you think through not only the fun, memorable events that you want to prepare for but also the unexpected. For example, it can help you organize your finances into separate “buckets” to take advantage of different risk profiles, time horizons, and opportunities based on different scenarios that may occur in your life.
If you don’t think about what is in the realm of the possible, you won’t know how to react when it matters.
4. Balances Out the Volatility
The fluctuations in the market are enough to make the average person dizzy. Fortunately, our goals can remain steady and true. If you adhere to a personal financial plan you will steadily pursue the stability of your goals instead of chasing the chance of a big return. This consistency helps decrease the chance of making a decision that is driven by emotion rather than logic.
5. Allows You to Enjoy the Moments That Matter
If you read almost any article on time management, the experts recommend focusing your energy on the most important activities first. Instead of getting distracted by time-consuming activities that don’t move you toward your goals, you start your day with a big win.
Goals-based financial planning can do the same thing. Day by day, it gives you the freedom to share your financial and emotional wealth with others. In other words, it enables you to live your values, fund your dreams, and share moments that matter with those around you because you put them first in your life.
Ready to Take the Next Step in Your Financial Journey?
Only you can define who you are and what you want out of your life—and to get there, you need to be able to articulate your goals, priorities, and values. Goals-based personal financial planning is one great way to make that happen.
At Harvest Wealth Group, we believe firmly in goals-based financial planning, and we use these types of discussions to help us build relationships with our clients for the long run. And as your needs change and evolve, our experienced professionals will still be there to provide a full range of services and advice to help you achieve your goals.
Ready to take the next step? If so, we would love to talk with you.
About the Author
Garrett German* founded Harvest Wealth Group with the aim to create a meaningful experience that will impact his clients, in a significant way, both personally and financially. After your first meeting with our team, you’ll be on your way to financial clarity and confidence.