Adjusting Your Financial Plan to Reflect Changing Priorities

Have you ever created a spending plan, or set savings goals, only to find yourself falling off the bandwagon a month or two later? The problem that many people have with creating a financial plan, is that they assume it’s a set-it-and-forget-it, and we don’t blame them! It would be incredibly convenient to create a one-time plan, stick with it, and always trust that your financial life was neatly squared away. 

Unfortunately, that’s rarely how financial planning works. 

Financial Plans Aren't One-And-Done 

As people, we’re not always great at planning for the long-term. Psychology says that our fight or flight reflex, as well as how our brains process familiar patterns while scanning for new information to help us make decisions, impacts our ability to foresee and plan for long-range problems. 

Our team has found this is true in the world of financial planning, as well! When we talk with our clients about their long-term plans, one of the hardest questions for them to answer is:

Where do you see yourself in five years?

However, it’s not only the way our minds work that makes long-term financial planning a challenge. The truth is that your values change over time, and your financial plan needs to keep up! Creating a one-time plan may serve you in the short term, but it likely will have aged in 5, 10, or 20 years. 

As you grow, your strategy should grow with you and take all of your updated goals into account. This is one of the primary reasons we work with our clients in an ongoing capacity. It’s so important to revisit your plan yearly at a minimum, or any time you have a major life change that shifts your values and priorities. 

Examples of Values That Might Change

When you’re first making your financial plan, it may seem like the intentional work you do to set your values-based goals will be long-lasting. This is true to an extent! Your core values may stay consistent over the course of your lifetime. You and your spouse or partner may value family, faith, education, and travel when you first sit down to set goals and build your financial plan. However, the way those values show up in your daily life change depending on the season you’re in.

For example, when you’re a young family, you might truly value travel. Maybe this shows up in your financial plan as setting up cash flow in a way that supports at least one week-long family vacation each year. You could go on these trips with your family for years, and always feel fulfilled. Then, one year, you take a trip to the Caribbean together - and it changes your life. The different pace of life and the way your kids respond to spending more time together in the great outdoors instead of on their phones is a game-changer. 

Suddenly, your travel-inspired financial goals might change from “take a week-long trip each year” to “own a vacation property in the Caribbean.” You’ve kept the same core value but now have a very different financial goal you’re striving for. 

Other life events can shift your financial goals, even if they’re still aligned with your core values. You could decide to pursue a new job opportunity in a different industry, have a new baby, or take on the responsibility of caring for aging parents. 

Even on a smaller scale, your priorities can shift dramatically from month to month. For example, maybe you were planning to buy a new car in three years, but after your third visit to the auto shop this month you’re quickly coming to realize that the big-ticket purchase just can’t wait. 

How to Adjust

So, what do you do when your priorities change? 

Your first step is to make sure that your new priorities don’t derail all of the other goals you’ve been working toward. You wouldn’t want to completely stop contributing to your retirement fund just because you decided to buy a vacation home in the Caribbean. 

That being said, adjusting your strategy to accommodate new priorities likely will mean that you need to make a few sacrifices. If the Caribbean vacation home is truly your top priority, you may not be able to continue saving for the brand new Lexus you’ve been eyeing. Instead, find a way to strike a balance between priorities to keep yourself organized and on track.

For example, you might: 

  • Continue to contribute toward your retirement fund

  • Start saving toward your dream vacation home with a goal of having it purchased in five years

  • Decide to buy a less expensive, used sports car that’s a few models older than you were originally planning to purchase

Make sure that you’re comfortable with the outcome of changing your strategy. It’s never comfortable to give up goals you were dedicated to, but knowing you’re moving toward an end result you’re even more excited about should outweigh the downsides.

One way you can make future changes to your financial plan more seamless is by creating a strategy that moves you toward multiple goals to start with. Many financial planners will recommend focusing on one goal at a time with laser focus. However, the drawback of this plan is that if you decide to shift you have to completely pivot and start over each time your priorities change. At Beyond Wealth, we always try to ensure that our clients are chipping away at multiple goals a little bit at a time.

For example, you might want to:

  • Pay off debt

  • Save for a down payment on a new house for your growing family

  • Build a retirement nest egg

  • Take your family on a Disney vacation

Together, we’d help you decide what your top priority is, and throw the bulk of your effort into achieving that particular goal while still putting a little towards something else. What we find is that when you’re working toward multiple goals at once, it’s much easier to make adjustments if your priorities change with time. 

Need Help?

Changing priorities can be overwhelming when you’re trying to stay on track and achieve both your short and long term financial goals. Working with a financial planning team can help you strike a balance between sticking the course when it counts, and making adjustments as what you want out of life changes. 

Want to learn more? Reach out! We’d love to talk to you about your goals.