A Simple Three-Step Framework to Revamp Your Financial Plan and Achieve New Financial Goals
There is a common misconception in personal finance, and it’s wreaking havoc on many people’s money. It’s the misconception that once you’ve created your financial plan, you are set—everything is on autopilot, and you just need to “stick to the plan.”
While there are many benefits to sticking to your financial plan during hard times—like avoiding emotional reactions to the market—too many view their financial plan as immutable law rather than a flexible framework. This can cause many to put in the initial legwork of defining their “why,” assessing their financial situation, setting unique financial goals, and hand-crafting a financial plan to reach their goals, but failing to update their financial plan as life shifts and changes.
The result is using an outdated playbook to reach new goals or staying focused on old goals even though your preferences have changed. This is not a good fit for you, your money, or your ability to reach your financial goals.
In this article, we’ll explore a simple three-step framework to help you revamp your financial plan and get back on track to achieving your ultimate financial goals.
Start, Stop, Continue.
The first step towards revamping your financial plan is to look at your existing goals and strategies and identify what you should start or add to your financial plan based on your current situation.
Consider the following questions:
- What’s changed since I created my initial plan?
- What’s important to me now that wasn’t important to me then?
- What would I like to get out of my money that I’m not getting currently?
- What new financial goals do I have?
By asking yourself these questions, you can begin to identify new goals or strategies that you can add to your financial plan to bring it closer in line with your current situation.
For example, suppose you created your initial financial plan before you had kids and are in the process of revamping your strategy. In that case, you may identify saving for college and designating a guardian for your minor children as new and essential aspects of your financial plan. These can be valuable goals to add to your financial plan, and doing so will improve your overall financial health. As you add these goals, you may also identify the strategies or tasks that’ll help you reach them, such as establishing a 529 plan to updating or drafting your estate plan.
Remember, start is all about identifying holes in your existing plan and filling them with new goals and strategies to create a more well-rounded and up-to-date financial plan.
The next step is reviewing your plan to identify what goals or strategies you should stop using to update your plan. As life changes, you should feel empowered to quit using specific strategies or pursuing certain goals when they no longer align with your path to financial freedom.
Consider the following questions:
- What goals have I been pursuing that no longer fit me?
- What strategies have worked in the past but likely won’t work in the future based on where I am headed?
- What investments have I made that don’t feel like the right fit?
By answering these questions, you can begin to identify aspects of your financial plan that are no longer working or no longer fit since your life and preferences have shifted over time.
A typical example would be a couple or individual approaching their golden years and preparing for the transition into retirement. Often, they will have invested aggressively during their working years to maximize the growth of their nest egg, knowing that they have time on their side and can ride the ups and downs of the market. This approach has served them well over the years and allowed them to amass a healthy nest egg to provide income during retirement.
However, now that they’re approaching retirement, it may be time to consider stopping or modifying their aggressive approach to investing, opting for a more balanced or conservative “retirees portfolio.” By identifying an existing strategy that will no longer work during their upcoming transition, this couple or individual can be set up for success and ensure that their assets offer them income and stability throughout their retirement.
Stop is all about letting go by understanding what has worked for you in the past may not work for you in the future, and that’s ok. It doesn’t mean it was a bad strategy or goal, but simply that it no longer fits with where you are now, or where you are headed.
The third and final step towards revamping your financial plan is to identify what strategies have been working well and you predict will continue working well based on your current situation and identify the financial goals you would like to continue pursuing.
Consider the following questions:
- What strategies am I using that will continue to be a good fit going forward?
- Which financial goals would I like to continue pursuing based on where I’m at in life?
- Which investments have been a great fit and will continue to be a great fit?
As an example, if you’ve been aggressively saving for retirement in tax-advantaged accounts to manage your annual tax liability and create financial freedom, and that’s still a good fit, then keep up the great work. As long as you’re still interested in financial independence and lowering your annual tax bill, and aggressively saving is still a good fit, then you can continue doing so, knowing that it fits with your initial and current financial plans.
During the continue phase, remember the old adage, “If it ain’t broke, don’t fix it.” Often, you’ll find that many of the goals you outlined initially ring true today, and many of the strategies you’ve been using will continue to provide the outcomes you’re looking for.
TrueNorth Wealth Will Help Craft a Custom Financial Plan for Your Future
If you’ve been searching for a fiduciary CFP® professional to help you revamp your financial plan, complete with a custom investment portfolio to improve your financial future, the team at TrueNorth Wealth can deliver.
TrueNorth Wealth is one of the leading wealth management firms doing business in Utah and Idaho. We have offices in Salt Lake City, Logan, St. George, and Boise. Here at TruthNorth Wealth, our advisors focus on assisting our clients with building a long-term strategy to maximize financial security while also allowing them to enjoy their current lifestyle. We achieve this goal by pairing our clients with dedicated CFP® professionals, utilizing comprehensive resources, and becoming personally invested in our client’s success.
For TrueNorth Wealth, it’s more than dollars and cents. It’s providing an essential service to communities across Utah and Idaho, helping them achieve financial freedom through investment planning and so much more. To learn more about TrueNorth Wealth and our services, visit our website or call (801)-316-1875 to schedule a no-cost consultation.