Life has a way of surprising us with twists and turns—whether it’s marriage, the birth of a child, a sudden career change, or retirement—these events can significantly impact your long-term financial outlook. If you haven’t revisited your financial plan recently, now might be the perfect time to do so. Your goals and priorities evolve with time, and your financial plan should keep up.
In this blog, we’ll explore when to re-evaluate your lifestyle goals, the steps and strategies needed to revamp your financial plan, and why working with an advisor makes the process a breeze.
When Do You Need To Re-Evaluate Lifestyle Goals?
Life is dynamic, so your financial plan must adapt to keep up. If you’ve recently undergone a major life event or have shifted your priorities, it’s time to re-evaluate your lifestyle goals.
Major life events such as getting married, expanding your family, receiving a promotion, or entering retirement can have lasting effects on your financial trajectory. These shifts often require a fresh look at your financial goals to ensure they align with your new reality. Consider a young couple planning on welcoming their first child soon. Instead of continuing to save for a new car, they will likely shift their priorities to preparing for college education expenses.
Or take a mid-career professional who receives a significant promotion. Their new responsibilities will likely change their long-term retirement outlook. Perhaps they can retire earlier if they adjust their savings strategy appropriately.
You also have to consider your evolving values and beliefs. As people grow and their experiences shape them, their values and priorities change. Perhaps you once prioritized travel and adventure but now find yourself focusing more on securing your family’s future or retiring early. Or you have new goals centered around sustainability or health-related lifestyle changes that might impact spending and savings plans. These evolving priorities can influence both short- and long-term financial planning.
How to Re-Evaluate Your Financial Plan: 3 Simple Steps
As your priorities evolve or you transition into a major life change, you’ll need to re-evaluate your financial plan. We like to break it down into 3 steps: goals, objectives, and budget.
1. Assess Your Current Goals
The first step in re-evaluating your financial plan is to look at your existing goals. Are they still relevant? Are they achievable, given your current circumstances? Make a list of your goals and decide whether or not they still reflect what you want. Your previous goals may no longer align with your lifestyle ambitions, so identify areas that need adjustment.
2. Update Financial Objectives
Once you’ve reviewed your goals, it’s time to set new targets and adjust previous ones. Whether you want to retire earlier, start a business, or support a cause, establish clear, actionable financial objectives that align with your current needs and desires.
You can also modify previous goals to meet your objectives, whether it’s downsizing your home or increasing contributions to your child’s 529 plan.
3. Review and Adjust Your Budget
Budgeting gets a bad reputation as being ‘boring’, but your budget is the foundation of your financial plan and needs to evolve as your priorities shift. Review your income, spending, and saving patterns and adjust your spending habits and savings strategy to support new financial objectives. This may involve cutting discretionary spending like eating out or reallocating resources to support new objectives.
3 Strategies To Renew Your Financial Plan
Reworking your financial plan can seem impossible, so let’s break it down into 3 easy-to-implement strategies.
- Create a Flexible Plan
- Flexibility is key when it comes to long-range financial planning. Incorporate contingency plans and create room for adjustments so your financial plan can pivot as needed. You may consider diversifying your investments to fit your risk profile or shifting savings into more flexible accounts to meet changing goals.
- Set Short-Term and Long-Term Goals
- Achieve a balance by aligning short-term priorities like building an emergency fund with long-term goals such as retirement or estate planning. To avoid getting overwhelmed, break down each goal into manageable, actionable steps and tackle them incrementally. Rome wasn’t built in a day, and neither will your financial plan.
- Establish Regular Review Sessions
- Life is constantly changing, so schedule regular check-ins—annually or semi-annually—to review your financial plan. There are many tools (often free!) like budgeting apps, spreadsheets, or financial management software that you can use to track progress and stay on top of your goals.
Work with your Financial Advisor
Your financial advisor is the missing piece to your financial planning puzzle. A financial advisor brings expert insight into optimizing your financial plan based on life changes and evolving priorities. They can help tailor solutions, offer objective guidance, and ensure your plan aligns with your goals and values, which is something Google just can’t provide!
The best part? It’s a collaborative process. You and your financial advisor are an unstoppable team. Working together with a financial advisor allows for a more holistic approach to your financial planning, ensuring your plan remains aligned no matter how many curveballs life throws at you.
Long-Range Financial Planning Done Right
Major life changes, shifting priorities, and evolving goals are all part of life’s journey; your financial plan should grow with them. If it’s been a while since you’ve revisited your financial plan, now’s the time. Take charge of your financial future today by setting up a consultation with one of our financial advisors at Woven.