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When It Comes to Financial Planning Focus More on Goals and Less on Numbers

When It Comes to Financial Planning Focus More on Goals and Less on Numbers

October 16, 2018

Creating a long-term financial plan that ties your life aspirations to your financial goals can help you to distinguish wants from needs, establish clear priorities, and avoid misguided investment decisions. This is why when it comes to financial planning you should focus more on your goals and less on the numbers.

Financial planning is a complex, lifelong process that people tend to approach with a numbers orientation. What rate of return do I need to reach my goal? How much insurance do I need? Can I afford a bigger house? How much money do I need to save for retirement?

To support a pursuit of the "right numbers," people often use separate advisors. They may call on a banker, a financial planner, an insurance agent, a tax professional, and an estate planning attorney, all to oversee the various components of their household wealth. But can too many cooks spoil the broth? Moreover, how do you ensure that each of your advisors is working in sync with the other?

This "siloed" approach to financial planning can easily lead to redundant investment strategies that could create exposure to unnecessary levels of risk. It may also result in multiple, random investment accounts in need of consolidation. Furthermore, such an approach may inadvertently overlook crucial tools, leaving entire planning areas to chance.

Unlocking Financial Synergies

When viewing your financial goals - such as buying a home, paying for a child's education, or saving for retirement - you may typically think in terms of what those goals cost rather than how achieving them might affect your life. If, however, you were to re-engineer the planning process and assess your current life issues and future aspirations prior to selecting investments and asset allocation strategies, you may be in a better position to achieve satisfactory outcomes. Perhaps equally important, by putting life circumstances at the center of financial decision-making, you may find more meaning in your actions with regard to money.

Indeed, values have a significant role to play in determining how individuals manage their assets. This is one way in which a holistic approach to "financial life planning" enables individuals to better assess their wants and needs, establish meaningful priorities, and avoid misguided investments. And, as life circumstances and priorities change - as they inevitably will - so do financial goals. In this way, individuals employing a holistic approach to planning can easily identify and address those areas of their financial lives that are still working well and those that may be hindering their financial well-being.

Crafting a Financial Plan

Crafting a financial plan that reflects your unique situation and that ties your life aspirations to your financial goals is part art, part science. To achieve this level of planning you need to rely on the guidance of a single skilled advisor - someone who will take the time to get to know you and your circumstances and who will put together an appropriate combination of vehicles, strategies and, where appropriate, additional planning professionals to help achieve your goals - whatever they may be.

The Benefits of Working With a Financial Advisor

If you want to explore putting a long-term financial plan in place that will help you to achieve your life goals, contact our team at Castle Financial today at (732) 888-4994 for a free consultation. We work closely with individuals and families across the United States to help them reach their future financial goals.

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