While financial planning is an effective tool for meeting short-term goals, it is also a crucial aspect of securing a stable financial future. Big-picture financial planning takes into account the overarching goals of your financial life, which may include budgeting, saving, investing, building and protecting your assets, and planning for retirement

Effective big-picture financial planning will allow you to identify and prioritize your long-term financial goals and develop a strategy for achieving them over the course of your lifetime. It is a process that requires a clear understanding of your current financial situation and future needs.

Recognizing the importance of a big-picture financial plan can be your first step toward ensuring a comfortable, livable future for both you and your family. 

Why should you have a big-picture financial plan for your long-term goals? 

Financial planning refers to the practice of managing your finances. As part of your financial planning process, you can evaluate your current financial situation, identify your goals, and take actionable steps toward budgeting, investing, and saving. Best of all, financial planning can help you comfortably meet your lifetime milestones. 

Many people start financial planning when they want to meet short-term goals, such as making car payments or paying off student loans. While you should make actionable short-term goals part of your financial plan, you should also set up your finances so that they serve you in the future. By making long-term financial goals — like saving for retirement — you can help set yourself for success years down the road. It can also help you remain proactive and organized, especially if you run into unexpected expenditures like inflation. 

Only about 30% of Americans currently have a financial plan in place, but it is not too late to start your big-picture plan. Whether you want to save for retirement, invest or organize your estate, big-picture financial planning can empower you to accomplish your goals. 

How can you plan your finances around big-picture goals?

Financial planning is holistic and multifaceted. Rather than focusing on a single aspect of your finances, a good financial plan provides a road map for your financial future and can help you stay focused and motivated, even when faced with unexpected challenges. As a result, you can create a realistic picture of your future.

When planning your finances around long-term goals, you can adhere to the following steps: 

  • Set clear long-term goals — Your big-picture financial plan should be informed by clear, measurable goals and realistic ways of achieving them. Without identifying your financial goals, it can be difficult to determine what you should prioritize, and you may find yourself wasting valuable time and resources on things that do not align with your long-term goals. Determine what you want to achieve in the long term, such as saving for retirement, buying a house or paying for your children’s education. Set specific targets for each goal and create a timeline for achieving them.
  • Determine your current financial situation — Examining your current spending habits can help you create a long-term budget according to your income, expenses and net worth. Performing a cash flow analysis of your personal finances, for example, can help you identify areas where you may be over- or under-spending or investing. You can then make adjustments as necessary to ensure that you are meeting your long-term goals.
  • Create a long-term savings and investment plan — Your money can work for you over time. Long-term savings and investments like stocks and mutual funds may offer higher long-term returns than short-term savings options, such as savings accounts. Additionally, having a long-term savings and investment plan in place allows you to regularly contribute to your savings and investments, helping you stay on track for achieving your goals. It also enables you to be more flexible and adaptable when unexpected expenses arise. Your plan may involve diversifying your investment portfolio across different asset classes to reduce risk and increase potential returns over time.
  • Review and adjust your plan — As your goals and financial situation evolve, your big-picture plan will too. For example, you may come across new financial risks. To mitigate or manage your wealth around those risks, you can make sure that your plan is adaptable enough so that your long-term goals are not derailed by unforeseen events. This will help make sure you are still on track to achieve your big-picture goals.
  • Seek professional adviceFinancial advisors have the knowledge and expertise to help you make informed decisions about your money. They are trained to analyze your financial situation and make recommendations that are tailored to your specific needs and goals. While making your big-picture plan, consult with a CERTIFIED FINANCIAL PLANNER™ professional to help you create a plan that takes into account your unique circumstances. They can provide valuable guidance and advice on how to best achieve your goals.

Besides the above steps, how else can you improve your big-picture financial plan?

In addition to following the above big-picture financial planning tips, you will want to make other smart financial decisions to ensure that your assets are protected as they grow. As your financial responsibilities and goals increase over time, you can: 

  • Increase contributions to your retirement accounts Retirement planning is a lifelong process that can help you establish a comfortable life when you are older. While you may have already established a retirement plan, you can increase your contributions to your retirement accounts over time. Doing so can help ensure that you have enough savings to support yourself during retirement, especially since the earlier you start saving, the more time your money has to grow through compounding interest. Additionally, many retirement accounts offer tax benefits, such as tax-deferred growth or tax-free withdrawals, making them an attractive savings option. Speak to your financial advisor to learn how your retirement plan can fit into your big-picture goals.  
  • Make sure your insurance policies are up to date — Insurance policies provide financial protection in case of unexpected events such as accidents, illnesses or natural disasters. Having adequate insurance coverage can help protect your assets and income, and prevent you from incurring large unexpected expenses. Keeping your policies up to date also ensures that your coverage aligns with your current needs and financial situation. You should make sure that your life, car and home insurance plans match your financial goals as well as protect your family from unexpected difficulties. To determine what coverage is appropriate for you, it is best to consult with a financial advisor.
  • Automate your savings — Automating your savings is important from a financial planning perspective because it helps to ensure that you are consistently setting aside money for your future goals, such as retirement or a down payment on a house. By automatically transferring a portion of your income into a savings account each month, you can avoid the temptation to spend that money on nonessential items and build your savings over time. Additionally, automating your savings can also help you stay on track with your budget and make it easier to reach your big-picture financial goals.
  • Develop your emergency fund — You should have at least three to six months of living expenses saved in the case of an unforeseen emergency. Make sure that the amount of money in this fund is congruent with inflation and your area’s cost of living.
  • Organize your estateEstate planning can help protect your assets from taxes, creditors and lawsuits. It can also help ensure that your assets are distributed according to your wishes after your death or in case you can no longer make financial decisions for yourself.  Estate planning can also give you the opportunity to designate guardians, trustees or other fiduciaries to manage your assets in your stead. If it aligns with your long-term financial goals, you can also plan to increase your charity by establishing charitable trusts upon your death.
  • Continuously educate yourself — Educating yourself about financial trends while financial planning can help you make more informed decisions about your investments and savings. It can also help you anticipate market fluctuations and make adjustments to your portfolio accordingly. Additionally, staying informed about financial trends can help you identify opportunities for growth and diversification.
  • Keep an eye on your credit score and debt — A good credit score can help you qualify for lower interest rates on loans and credit cards, which can save you money in the long run. Additionally, a good credit score can make it easier for you to qualify for a mortgage or a car loan, even increasing your chances of getting approved for rental applications and even job applications. Therefore, it is important to keep an eye on your credit score to ensure that you are in a good financial position and to make sure that you are taking steps to improve your credit score if necessary.

Talk to a ProVise CFP® professional about how to start big-picture financial planning

The big-picture financial planning process does not have to be stressful. At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.

Are you ready to talk to a professional about big-picture planning for your long-term financial goals? Contact ProVise today to schedule a complimentary consultation.