As you settle into the holiday season, you may be excited to spend time with your family and focus on what matters in life. As a result, you may have spent a little extra on travel and gifts for your loved ones. Does your financial strategy account for that? You might think that something like your budget doesn’t have much to do with your investment plan, but in reality, your budget, income, and investment strategy are a few of many aspects of your financial strategy that should be structured together to meet your needs and goals.
Your financial strategy should take even small things, like holiday spending, into account![1] If you’re paying for holiday gifts, it’s going to impact your savings rate or make available some new tax strategy that may require you to change up your investment plan or income timeline, for example. Potential changes and opportunities like that are things your financial professional should be asking about and helping you strategize for. If you’ve had a financial professional help manage your money who doesn’t keep up with how your life and financial situations are changing, it’s possible that person wasn’t the best at helping you get the most out of your finances.
For instance, many financial professionals or personal finance services may only consider a handful or just one aspect of your financial situation, such as your investment strategy, for example.[1] You come to them with some amount of money that you want to allocate into investments, and they determine how that money should be invested. While this is an important part of the financial planning process, it’s not a comprehensive approach. Yes, a financial professional should help you to invest your money, and they need to be current with their market understanding and research. But by siloing your investment plan from the rest of your financial situation, there’s no guarantee that they’re making the right choices for you. Believe it or not, your whole financial picture should be accounted for when developing a retirement strategy. In short, hiccups may occur if one aspect of your financial situation changes without the rest of your strategy adjusting accordingly.
A holistic, encompassing approach to your financial strategy can be the difference between struggling and thriving through retirement. But what exactly does this financial strategy mean? An encompassing approach would, for example, include much more than an investment strategy. This means the financial professional would be able to understand and factor in multiple areas of your financial situation to gain a deeper understanding of your needs, potentially gaining the ability to offer more informed solutions to help meet your financial goals. Think about it: investing isn’t the only thing you’re doing with your money. So, why shouldn’t your investment strategy factor in your expenses, tax situation, future goals, legacy plan, and more?
At our firm, we offer an approach to retirement planning that considers not just one aspect of your finances but how you live your financial life. If you are looking for an advisor who creates a plan built around your life that fits with your unique situation and goals, reach out to us today for a complimentary review of your finances.
