Financial Planning for Your Future in the Game of Life

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When I coached high school soccer, I always looked forward to the beginning of the season. Evaluating players, preparing practice plans and deciding how to put the best team on the field were all important elements of preparing for a successful season. As much as you try to incorporate all types of scenarios to make sure your team is well-balanced offensively and defensively, many unknowns can pop up during the season. However, planning helped minimize the negative effects of the unexpected and often led the team to a victorious season on and off the field.

The same thing can be said for planning for your future. There are many scenarios, both positive and negative, that your financial plan must cover. Anticipating the challenges you may encounter and determining the key steps to reach your goals are important elements in successful planning for your future. As the saying goes, “He who fails to plan is planning to fail.”

These steps are key when planning for your future:

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1. Determine your end goals.

Identify what is most important to you and picture what you want your future to look like. Is it travel? An early retirement? Creating generational wealth? Write the goals down.

2. Review your assets and liabilities.

Just like reviewing the skills of the players on a team, examining your current assets and liabilities and future ability to grow your assets gives you a good look at your current situation. Create a spreadsheet documenting it.

3. Understand your strengths and weaknesses.

Determining the strengths and weaknesses of your team helps you evaluate the tools at your disposal. Don’t ask a natural defender to be a striker.

The same can be said for planning your future. If you know you are a spender, accept it and plan for it. Celebrate your strengths and accept your weaknesses. Being honest with yourself allows you to accurately assess your resources.

4. Develop a strategy for meeting your goals.

Successful people break down and document the steps and measurable sub-goals required to meet their end goals. Expecting players to act as a cohesive winning team from day one is not practical, but getting them to know their teammates’ names by the end of the first week is a realistic measurable sub-goal.

Establishing a goal of retiring at 50 when you are 20 is hard to measure along the way. Breaking it up and establishing specific actions and measurable goals will lead to better success. Saying you will save $5,000 in 2024 by spending $600 per month less on dining out and clothing is measurable and is a step toward the end goal of retiring at 50.

5. Huddle with your team.

Coaching the players to rely on each other and to work as a team leads to wins. Creating a team of people to support you as you work toward your goals will lead to a more successful outcome. Let your friends know that you’re saving for retirement, so you are eating out less. Find a financial adviser who will make you accountable and help you create the steps and mini-goals that work toward your end goal.

6. Evaluate your actions.

After every game, I would evaluate what worked and where changes needed to be made. The same must be done as you work toward your end goal. Each year, if not more often, review your action steps and mini-goals to see if changes need to be made.

Perhaps saving $600 monthly by dining out less and buying less clothing isn’t realistic. Your goal may change, or an action step might change. For example, you might decide, “I still want to save $600 per month, but I need to buy a less expensive car or live in a less expensive house.”

The game of life isn’t always easy. Make sure to appreciate each success along the way. Don’t be too hard on yourself when things do not go as planned. Be persistent, and continually evaluate and adjust your actions as needed. Achieving your goals is not a one-time event but a series of smaller, consistent actions.

Disclaimer

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Mario R. Hernandez, Principal at Longevity Wealth Management, has been a Certified Financial Planner (CFP®) since 1994 and brings a vast amount of experience in the financial planning and investment management business. Mario previously headed up the wealth management division at Gemmer Asset Management LLC and provided clients with holistic planning and helped prepare them for retirement.