Financial plans are created to go the distance, often forecasting your probability of success decades into the future. The basis of your financial plan are your goals that may include funding college education/s, having enough income to determine where you spend your time, or taking larger longer vacations. You are the author of what you want, a financial plan may bring structure to making your ideas a reality.
What if you do not know what you want? What if your current needs are met, but you are unsure on thinking so far out into the future? Is it acceptable to think more short term as you sort your options and figure out next steps? I believe so.
As we’ve shared previously, planning is not a straight line. Rarely do plans (or life) play out as we intend them to. We can control a number of inputs, but that does not mean we will achieve the desired results. Our environment and where we choose to spend our time will influence our thoughts and planning possibilities.
I believe working and living from home the past year and half has impacted our ability to strategically think beyond today or this week. So much stress for such an extended period can take a toll on our brain and decision-making capacity. We need to refresh our approach to accomplish the goals we want. How? Begin with short-term planning. This allows us to increase our confidence in the near term before looking decades into the future.
Short term planning may be described as addressing goals that are approaching in the next five years. Goals often require a combination of money and time. Having cash in an accessible account with a stated purpose supports short term planning. Setting time aside to think about the job description of all your cash and current income makes a difference. This allows the right dollars to be directed to the right purpose/goal. Are there any leaks in your financial plumbing system keeping you from advancing closer to what you want? Assessing short term priorities will identify this and allow you to plug any holes before reacting to a “pipe burst” later.
Gaining short term clarity on what you want builds the necessary foundation for long term planning success. It’s possible your long-term plans have shifted, or you are less excited about what you once thought was important. This is completely natural as many of our goals and priorities change overtime as we do. By pivoting through different careers, employers, family demands, and a pandemic your long-term goals may be a bit hazy now. You might still be trying to figure out what you want one day when you grow up? That’s ok regardless of your age! The key to removing pressure from long term planning is gaining assurance via short term goal setting.
As your confidence grows your actions have purpose. Goals will vary family to family and plan to plan. Plans aren’t meant to be perfect and that’s ok as it’s critical to revisit them often. Short term planning is lot like the “choose your own adventure” books I loved as a young reader. You get to the end of each chapter and determine where your character goes next. To accomplish massive things in life, it takes decisions that may be made one chapter at a time.
Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Flowerstone Financial are not affiliated.