Designing Your Financial Goals by Starting with the End in Mind

I’m writing this in late December; a time when most of us take a look at the past year and look forward to the one on the horizon. You too have probably read the typical articles on goal setting for the new year, specifically, on what financial goals you are supposed to have, the best place to save money and how to create a budget. But how do those articles know what matters to you and what you want your life to look like?

Throw it all out! Scrap the usual and let’s start with the end in mind. First, imagine your ideal lifestyle and in turn, structure your financial life around your personal vision. Why let a cookie cutter financial approach enforce a lifestyle that you might or might not want for your future?

Instead of focusing on the goals you are “supposed” to have, let’s focus on the current and future life you want and design your financials around that.

I would rather see my clients create sustainable cash flow over a long term period of time than burning out, happily retiring at 66 and then doing nothing. This isn’t to say that you can’t design a plan in which you could afford to retire at 66, but you should retire only because you want to.

Finding financial independence, creating sustainable income and structuring your money around your ideal life are the keys to building a plan that delivers happiness now and in the future.

Step 1: Design your ideal life

Instead of grinding out 90 hours of work each week, think about a situation in which you get paid based on productivity. For example…

To increase your productivity without sacrificing the experiences you seek, part of your ideal life may be to work out of the country remotely three months per year while traveling with your family. Many employers don’t ask that you punch a clock at your office and working remotely is perfectly acceptable, especially if you own a business.

Step 2: Establish the change in your financial needs that aligns with this ideal life

After studying your personal current monthly expenses, figure out how to structure your finances to fund this ideal life. It may be a larger travel budget, a bigger house, etc. Until you know this, you can’t create goals. Figure out the total monthly income (after taxes) needed to fund this ideal lifestyle.

Think about the timing of your financial needs as well as the total. For example, while you may wish to fund some tax-advantaged accounts, designed to use when you are older than 60, you may wish to more heavily put monies into an account that is available to you prior to age 60 without penalty, in order to fund the trips. Determine cost of each trip and from there, figure out how much in accessible dollars you need to pay for the trips.

In addition, if you knew you were going to live and work remotely in Tuscany, Italy this summer, the monies for this excursion would be invested differently than the funds saved for a trip to live in Australia 3 years from now. The longer the time period before the funds are needed, the more risk you can assume.

Step 3: Track and review

Finally, track and review. Most people I see every day in my practice fail to give this step the attention it merits. I suspect that people judge themselves too harshly and observing that they’re not meeting the goals they have set for themselves is psychologically painful; it’s just easier to avoid the tracking component. Keep track of your movements from total monthly income (net of taxes) and your monthly expenses. You cannot achieve what you do not track.

You can do this! Living your ideal life is totally within your ability. The barriers between your life today and your ideal life can be overcome, but only if you are willing to fully examine what you want, formulate a workable approach to making your vision a reality and monitor your progress towards the goal. Funding your ideal life is easier than you think, and it all starts with the first step.

Meredith Moore is a 20-year veteran of the financial advisory industry who specializes in bringing a customized approach to support the highly personal dynamics that govern her clients’ relationship with money and success. She is the recipient of numerous industry awards and a noted speaker and writer focusing on the intersection of power, money, and gender within relationships. Ms. Moore can be reached at www.moorewealthmgmt.com.

Meredith C. Moore, Registered Representative, offering securities through NYLIFE Securities LLC, Member FINRA/SIPC, A Licensed Insurance Agency. 1125 Cambridge Square, Suite C, Alpharetta, GA 30009 (770) 587–0281. Financial Adviser offering investment advisory services through Eagle Strategies LLC, A Registered Investment Adviser. Moore and Associates Wealth Management is not owned or operated by NYLIFE Securities LLC or its affiliates. Moore and Associates Wealth Management, as well as NYLIFE Securities LLC and its affiliates, do not provide tax, legal or accounting advice.