Your Plan Should Be Personal
When it comes to financial planning, there is no one-size-fits-all solution. While general principles like living within your means, budgeting, saving, and investing are universal, how you apply them should reflect your personality, values, and goals. A financial plan works best when it’s personal, not just a formula. This can apply to many different areas addressed in financial planning.
Spending and saving habits play a huge role and can vary a lot from person to person. A natural saver may thrive on tracking every dollar and reaching savings milestones quickly. A spender, on the other hand, might budget more for entertainment and experiences, choosing to save at a slower pace. If someone plans to work longer, that approach could still lead to long-term financial security. One caution with that approach is that preferences and goals can change. If you plan to save less, this may result in less flexibility if you change your mind or face circumstances out of your control, such as health challenges.
Another example of personal preference is risk tolerance. Some people are comfortable riding the highs and lows of the stock market and lean toward higher growth-oriented portfolios. Others sleep better knowing their money is in more stable, conservative investments. Neither approach is wrong, it’s about aligning your strategy with your comfort level and time horizon, as well as understanding the pros and cons and how they can impact your plan.
The main goal that most of my clients focus on is retirement, which is also very personal. Some aim for early retirement and invest aggressively, while saving more and living on less. Others plan to work into their 70s or beyond, giving themselves more freedom to spend now and less pressure to save aggressively in their early years. Similar to my earlier caution, I would recommend a plan that can provide flexibility in case things change. I’ve heard people say they love what they do and never plan to retire, but working forever may not be possible, so it’s good to have a way to address some of life’s uncertainties.
I could go on and on as to personal preferences on many financial topics like how much insurance coverage to have, whether to do Roth conversions, when to begin Social Security benefits, etc., but in the end, I believe the most important part of planning is being intentional. A strong financial plan considers your current lifestyle, future goals, and emotional comfort with money. It should also evolve as your life does, adjusting when your income changes, your family grows, or your priorities shift. And though there are smart financial strategies that should be considered and can have a significant financial impact, the most important aspect of your financial plan is that it reflects you. A successful financial plan isn’t just about building wealth; it’s about building a life that reflects who you are and what you value.
