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The purpose of financial planning is not to remove uncertainty or to predict your future financial situation with accuracy. Maximizing your resources to achieve long term goals requires embracing uncertainty. A plan gives you the framework to navigate the uncertainty with confidence. It recognizes that setbacks are part of the game, and are an opportunity to revise your plan, reevaluate your goals and priorities, and push forward. No one expected “a 2020,” but that’s what we got. Time to re-evaluate. Let’s make what we are going through an opportunity to evaluate what we really care about, our values, goals, and priorities, and adjust our plan accordingly. Here is a selection of our blog posts to help you do that. I suggest you start with the first two, then pick and choose what you think is most relevant for you, or read them all!
Take the long view
Your most important goals are usually long term. The ability to take the long view is key to achieving success in any aspect of your life because it contains some very valuable commodities, including patience and the ability to focus on what matters. Taking the long view is at the basis of a financial plan, and part of our core philosophy, as we discussed in our very first blog. While it is important to know the major events that are shaping our culture and use them to inform our plans, we have to realize that there is a lot of noise out there, and focusing on the long term can help us staying the course and avoid overreacting to the news.
Go through the process of planning
At the beginning of this year, we created a simple planning process. Going through the process helps you put the long view to practice. The idea behind the financial planning process is to change your mindset. From just going through life to maximizing your resources to achieve your most important life goals, something we could all use at this time. It includes a process of discovery of your values and priorities, and ways to get started in making meaningful changes.
Set meaningful goals
A key part of a plan is to set meaningful goals. Goals are measurable objectives that require planning and effort to achieve. You are likely to work towards your goals and stick with your plan only if the goals are meaningful to you. Financial planning helps you focus on the right goals. Take a look at our guide on goals to get started.
Take up simple budgeting habits
Especially in uncertain times, we want to be efficient with our resources. Budgeting is crucial to financial planning because it gives you awareness about how you use your resources, and highlights your financial strengths and weaknesses. We have created a simple way to get started with budgeting, without actually creating one, and some simple steps to create your first budget.
Build a safety net
Going through a period of real uncertainty like this one is the best way to appreciate our nature towards risk and evaluate the plans we have in place to overcome setbacks. You don’t have a sound plan for your desired goals in life until you plan for emergencies and setbacks. Read our guide to creating a safety net for your plan.
Review your investment philosophy
Yes we are going through unprecedented times. Or are we? Periods of high uncertainty for similar or different reasons have happened before. So before you make any drastic changes to your investments, take a look at our analysis of returns during prior pandemic episodes, and build your own, personal investment guidelines.
Connect with your future self
Sooner or later the uncertainty we are going through will be resolved. Leverage the power of financial planning to visualize the path to your goals! Going through the financial planning process, whether it’s your first plan or a revision of a previous plan, helps you create a connection with your future self, and make better money decisions today. So don’t wait, get started today!
Until Next Time!
Massi De Santis is an Austin, TX fee-only financial planner. DESMO Wealth Advisors, LLC provides objective financial planning and investment management to help clients organize, grow, and protect their resources throughout their lives. As a fee-only, fiduciary, and independent financial advisor, Massi De Santis is never paid a commission of any kind, and has a legal obligation to provide unbiased and trustworthy financial advice.
