Do Your Financial Goals Really Impact Your Life?

“Shoot for the moon. Even if you miss, you’ll land among the stars.” –Les Brown

This quote transports the reader to a mystical night, glimmering with hope and promise, and is the optimal backdrop for discussing financial goals. As financial planners, we talk about goal setting all the time, but what does that process really do for your financial plan, and can your goals truly affect your life?

We hope you’ll discover the central role that your goals play not only in your financial plan but also in how you live your life.

Goals are the heart of your plan

Your financial goals can be likened to the heart of your financial plan. Knowing your goals helps chart the course for our financial recommendations and lay the groundwork for your financial habits. Let’s look at a couple of examples. 

A couple whose retirement goal centers on living in their current family property in Northern Michigan will need a different financial set up than a couple who would prefer to spend the summers in Michigan but the winters in Florida. Snowbirds have unique tax considerations, housing options, travel costs, and more, making this goal special to them, and their financial plan. 

Their retirement lifestyle goals may mean that they have to save more in the years to come, which could be maxing out both spouse’s 401ks to fully funding their IRAs to strategically increasing funds in their portfolios. This increase in savings may mean, however, that other elements of their current lifestyle need to shift, like cutting costs on housing, entertainment, meals out, subscriptions, gift budgets, and more. 

As you can see, your goals set the tone for your financial plan. They also catalyze your actions and habits, which establish the framework for your financial life.

Beyond your financial habits, your goals impact the way you view the world and the satisfaction you find with your life. Ask yourself,

• Is there a certain path you’ve always wanted to pursue? (career trajectory, schooling, etc.)
• Where do you find meaning, purpose, and fulfillment?
• How can your goals support and drive those dreams?

Goals can help you figure out what’s most important to you and live your life with intention, confidence, and hope.

We can talk with you about your unique goals, values, and aspirations and help you align your money with your goals. Money is simply a vehicle to help you live your life. We love working with clients to figure out a way to use their financial resources in meaningful, fulfilling ways. 

Know the difference between short and long-term goals

It’s easy to clump all of your goals together but there are crucial differences between short-term and long-term goals.

Short-term goals are things that you want to accomplish in the 0-5 year mark. For you, that might mean helping fund your grandchild’s education, pursue an encore career, or become debt-free. 

Long-term goals, on the other hand, represent a more extended time frame. This could be something like saving enough to fund your dream retirement, pay off your mortgage, or find financial freedom.

Why is it important to have a mix of short and long term goals? Your goals inspire motivation and progress. They also give you something to work towards while bringing balance to your life. It’s essential to use your money in a way that is fulfilling both now and in the future; a healthy mix of goals helps you do that. 

If your only goal was to retire comfortably and you channeled every financial resource towards that goal, you might miss some elements along the way that were also important to you, like pursuing an advanced degree, buying a house, or having a more active charitable giving plan. 

Prioritize your goals effectively

Creating your goals is just the first step. The next is being able to prioritize them. You can’t realistically achieve all of your goals at the same time, so this is where you have to focus your efforts on the most critical ones and work from there. Ask yourself, 

• Which goals are the most important to you now and in the future?
• Are any of your goals time-sensitive?
• How will funding certain goals bring you joy and fulfillment?
• Are your current financial habits aligned with your goals?
• Which goals best reflect your values?

These questions are here to get you thinking deeper about the goals you set and the role they play in your finances and your life. When you create goals with intention, you place more value and emphasis on the process, which sets you up for success. 

It’s crucial to know that you don’t have to fund your goals one at a time. Funding your goals is all about finding the right balance between living for today and saving for the future. 

Don’t be afraid to make changes

Goals and financial planning have a lot in common: they are always changing. 

Your life doesn’t stand still and neither will your goals. The pandemic, for example, may have shifted your priorities or caused you to change your plan, and that is okay. Plans are made to be changed and as long as you approach any change with intention and meaning, your goals will still be able to guide you. 

Are you expecting your first child? Did you just launch a new business? Are you thinking about going back to school? These are significant and powerful life changes, so you may have to adjust your goals and plan accordingly. Some of these changes will impact your debt and cash flow, which means you’ll need to think even deeper about saving for the future and maintaining your progress toward long-term goals. 

At some point in your life, your goals will need to change. But when you take the time to intentionally weave your goals into your personal and financial plan, they will always be your northern star, guiding you where you want to go. 

As the sun sets on 2020, you might be thinking about the goals you want to set for yourself in the new year. Our team would love to help you think through your goals and how we can set your finances up to support them. Schedule a 15-minute call with us today to learn more.