Updated April 2023.
The role that finances play in your life is an important one, that’s why it is essential to establish a healthy relationship with your finances in order to maximize their impact on your life. How can you do that? The first step is to uncover your financial goals.
Setting financial goals can be a challenge – especially coming out of a challenging few years with COVID, market fluctuations, and now widespread layoffs in the tech sector. However, creating a strategy that’s rooted in your unique goals and values can help you to create a strong foundation that’s adaptable as your plan shifts and changes.
Today we’re going to go over how to transform your financial goals into a clear framework for your money with actionable steps to take.
Confront Your Fears
One roadblock I see again and again with my clients is the fear of not reaching their goals. They are stressed out about the prospect of their long-term goals and if their finances are in the right place to help them reach the goals they set.
Clients ask me:
Will I ever be able to retire?
It’s important to address this fear head-on. By naming the fear, you’re putting yourself in a position to find a way through it. Retirement is a goal that many people have. But I know that you don’t just want to retire, you want to retire comfortably and live the life you have always dreamed of. You don’t want to retire and be constantly stressed out about money, the health of your portfolio, or if you’ll need a part-time job to make ends meet.
It is important to know that you are not alone and so many people share this concern. Whether you are just starting out in your savings journey or if you have stuck with a sophisticated savings regimen, retiring comfortably is on the minds of many people.
Confronting the feeling of uncertainty in retirement can actually help shed light on the true nature of your financial goals. By thinking critically about this feeling, you will come to understand that your long-term financial goal for retirement is double-pronged: being able to retire and living the lifestyle you want.
Get underneath your fears and don’t be afraid to explore those feelings because they will help push you in the direction you need to go and can provide deeper insight into your situation.
Build A Life You Want to Live
You have a big financial goal: to retire and retire to a life you love. Now, what’s your next step? You want to take your goal and put it into action. We encourage you to start with your lifestyle and work from there. Take a look at these questions to get you started:
- What does retirement look like to you?
- How do you wish to spend your time?
- Where do you want to live?
- How will you align your lifestyle with your values, goals and priorities?
Building a lifestyle you love is one of the most important factors for a successful retirement. Applying your vision into a day-to-day reality is tough and is the reason that many new retirees feel lost or unfulfilled.
Once you have your vision for the life you want to live in retirement, then you can bring the finances back into play to set income goals and create an intentional budget. You’ll be able to see how much more you have to save or how much longer you have to work in order to make this vision come to life. You can do this in bite-sized steps to keep it simple and manageable.
Trust Your Finances
As a financially smart and conscientious person, you have done the work you needed to do to save for retirement. The last thing that you can do to transform your financial goals is to trust your finances.
So many people work and save their whole lives diligently but still live in trepidation about their financial situation. If you have put in the work, you will reap the rewards. When you evaluate your finances, see how you answer the questions below:
- Are you living in fear of your finances where you are compromising your lifestyle by being too frugal?
- Have you made a plan for the wealth you hold?
- Do you know what roadblocks stand in the way of your financial success?
- Are you reevaluating your strategy as your life and priorities evolve?
Your financial goals set the tone for your strategy moving forward. Here at FPC, it is our goal to empower you to use your finances to help you achieve your goals and live the life you really want. We strive to help bring you personal and financial success.
You don’t have to look at your financial goals in the same way that everyone else does. Dig deeper into your financial strategy to uncover any roadblocks standing in your way. Construct the life you want to live and build your budget around that vision.
Outline Next Steps
Setting big goals for your financial future is hard work. Luckily, once you’ve done the deep work to reverse engineer your goals, and address limiting fears and beliefs, you can start to put your goals into action. Here are a few steps to get started:
- Try setting micro goals. Micro goals are smaller, bite-sized goals that can help you move the needle towards your big goals (like retirement). For example, if your goal is to retire in five years and live in the mountains part-time where you love to ski, you can set micro goals that are more straightforward to accomplish now. Those micro goals might be:
- Price out condos in your favorite ski town and start setting extra savings aside to purchase a condo in retirement.
- Speak with rental market specialists to determine whether Airbnb’ing your condo is in your best interest after you retire, or if you’d rather keep it just for you, family, and friends.
- Increase your current travel budget to spend more time skiing/doing what you love, and exploring different towns and areas to get a sense for where you’d like to buy when you retire.
- Make a Plan A, B, and C. The truth is that life rarely goes exactly as planned. To counterbalance unforeseen circumstances, make a few backup plans that still allow you to live in alignment with your values! For example, if you wanted to retire and live part-time in your favorite ski town, that’s fantastic. However, unexpected layoffs or any number of other factors may prevent this dream from becoming a reality. A backup plan might be, if you can’t buy your own condo, you increase your travel budget to do a long-term rental with your spouse or partner every winter over the holidays where you can host family and enjoy the fresh powder.
- Team up with an advisor. If you’ve set your big-picture goals and are excited about the values-aligned retirement you’re working towards, working with an advisor can help you to create a technical strategy to get from Point A to Point B. You can set micro goals and milestones for yourself to get started, but working with an advisor can help you:
- Make a strategic savings and investment plan to grow your nest egg.
- Create a tax strategy that helps you maximize your retirement cash flow.
- Determine when to take your Social Security benefits.
- Estimate the impact that Medicare, long-term care insurance and other insurance coverage will have on your retirement budget.
- And more!
Want to learn more about working with an advisor? Contact us today. We’d be happy to help answer any questions you might have about setting goals for your retirement and creating a plan to achieve them.