Does Your Financial Plan Match Your Financial Goals?

A financial plan is many things, including a way to manage cash flow, debt, savings, investments, and insurance. But above all, financing planning in San Antonio is about achieving your financial goals. Whether it’s buying a home, saving for your children’s education, funding your retirement, creating a charitable legacy consistent with your values, or building and then selling a business, you need to set up your financial plan in a way designed to meet your goals.

If you don’t plan specifically to reach goals, you may find that you don’t ever reach them! All too often, life can get in the way of achieving long-term goals. You may want to retire in 10 to 15 years, for example, but either don’t have enough saved or don’t have a handle on how much you’ll need for your goals in retirement. 

Here’s how to make sure your financial plan aligns closely with your financial goals.

1. Map out your financial goals

The first step is to map out what your financial goals are. As long as you don’t commit them to paper or an open discussion, they can be vague –and vague goals don’t get accomplished.

Divide your goals into short- and long-term objectives. Where would you like to be financially in one year? Five years? Ten years? Twenty?

Within those time frames, what specific goals do you want to achieve? A more robust savings? A down payment for a home? A retirement portfolio sufficient for your golden year goals? Vacation funds? Children’s higher education funds? A commitment to charity consistent with your values? A business in the community or elsewhere? These are all examples to get you thinking; your personal and family goals can encompass anything you can dream about.

2. Meet with a financial advisor to review your current financial situation vis-à-vis your goals

After you have mapped out your goals, it’s time to sit down with a financial advisor to review your current financial situation.

Your financial advisor will analyze your current income and current expenses as the foundation of how to align your financial plan with your goals. First, they will analyze whether your current situation does match your goals. If you want to save for retirement, for instance, are you doing that, or is the money going to credit card debt payments? 

Second, they will craft a strategy to achieve your goals. If your current financial actions do match your goals, this may involve optimizing those actions, such as diversifying your investments to achieve robust returns and honing your tax planning to make sure that you aren’t paying more in taxes than necessary. 

However if the review indicates that your actual financial actions aren’t closely aligned with your goals, the strategies may be multi-pronged. If you need to maximize your retirement savings, for example, your financial advisor may recommend paying off expensive credit card debt first, and then contributing the maximum to 401(k)s or other tax-advantaged retirement savings once the debt is retired. 

3. Make sure your investment choices match your goals

Many goals require some form of savings. Your investment choices for these savings should match the goals. If you want a robust retirement, for example, your investments should be chosen prudently to maximize returns while also ensuring that you are adequately protected from investment risk. 

Your financial advisor can help you make investment choices for each goal. We advise on asset allocation for each portfolio, among asset classes like cash, stocks, bonds, and investments such as real estate, precious metals, commodities, and other alternatives. We diversify both among and within asset classes to provide the best blend of reward and risk.

Your investments should also be aligned with the time horizon for each goal, with your risk tolerance, and with your values.

4. Optimize your financial life

Trying to achieve your goals without optimizing your financial life can be a bit like trying to run a race in the mud. If you aren’t adequately planning for taxes, for example, you may be shelling out more in taxes than you need to – which affects your cash flow and ability to save to meet your goals. If you aren’t paying any attention to risk management, you may be going without crucial forms of insurance that protect you and your family. A lack of insurance or underinsurance can mean you are faced with bills to repair or replace assets that could have been covered with insurance.

In short, don’t overlook the overall optimization of your financial life to ensure your financial plan matches your goals. Your financial advisor can make sure your financial life is optimized by all of the following:

  • Tax planning
  • Risk management (insurance for all assets, such as homes and cars, plus life insurance, health insurance, and long-term and disability insurance if necessary)
  • Budget and cash flow management
  • Charitable giving
  • Wealth management, including portfolio management (investment choices, annual rebalancing)
  • Estate planning (wills, trusts, powers of attorney)

5. Revisit your goals

Goals aren’t static. Your goals will likely change throughout your life. Life events, such as marriage and children, will change them and introduce new goals. Your progress through life and new plans will change them. Your dreams and ideas will generate new goals. Finally, of course, your achievement of current goals will lead to new goals.

As a result, it’s a good idea to periodically revisit your goals. An annual visit with your financial advisor can assess your progress toward current goals and serve as a check-in about any changes. You can mentally review any life events that require a new goal.

Matching Goals with Financial Plans Is Our Objective at Pax Financial Group

At PAX Financial Group, located in San Antonio, TX, we are CERTIFIED FINANCIAL PLANNER™ professionals committed to working with you on important questions about your goals to help you explore all of your options and opportunities. We offer an array of consulting and holistic financial planning including specifics about your cash flow, debt, savings, investments, insurance, and other important financial elements. Our financial planning efforts involve comprehensive financial planning, crafting strategic plans to meet your goals, developing investment strategies, and monitoring changing conditions that can affect the achievement of your goals.

This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Biblically Responsible Investing (“BRI”) involves, among other things, screening for companies that fit within the goal of investing in companies aligned with biblical values. Such screens may serve to reduce the pool of high performing companies considered for investment. Investing involves risk. BRI investing does not guarantee a favorable investment outcome. PAX Financial Group has conducted due diligence for their Biblically Responsible Investing (BRI) process and proudly serves as each client’s advocate using fully vetted third-party specialists for the administration of BRI methodology. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax, or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product and should not be relied upon as such.

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