“We first make our habits, and then our habits make us.”
— John Dryden
Money habits can feel like they are part of you. They tend to be deeply ingrained or under the surface. It’s one thing to get up and go when you’ve set the alarm. It is another thing entirely to act consciously and strategically with your goals in mind.
The good news is that even if your current financial habits aren’t the best, it’s not too late to set things right.
The Value of Financial Planning: Navigation
Imagine waking up in freezy, snowy weather to go to the airport and take a flight, then emerging into a new location with a comfortable temperature and a sweet-smelling ocean breeze. You could have stayed in the snow and continued with your life, but suddenly, because you took a few steps to make a change, you get to experience something more comfortable and relaxing.
That is the power of facing and upgrading our money habits. It can be a palpable relief because the contrast lets us know how uncomfortable we had been.
Many money habits are adopted from family, friends, a spouse, or past experiences. It’s rarely a conscious process.
This trend would be fantastic if the world were full of people with amazing relationships with money. Unfortunately, the truth is few people excel financially without creating new habits. When your destination is specific financial goals, there is no cruise control.
Since our cave-dwelling days, humanity has functioned with a primary focus on short-term circumstances. If our ancestors hadn’t cooked warily, watching for sabertooth tigers circling the fire, you would not be reading this now.
In other words, this tendency is deeply ingrained, so no one is throwing stones. Distractions from a financial goal can be almost anything from a new set of golf clubs (right now instead of when they’re on sale) to a top-of-the-line digital TV subscription.
These things are not necessarily bad in and of themselves, either. Nevertheless, when anything diverts your focus—and funds—from the path established by your financial plan, you can expect underwhelming results.
Wealth Management Goals to the Rescue
Thankfully, this problem is often fixable. The solution (which is often somewhat painless, by the way) is consciously developing better monetary habits. Believe it or not, the process arguably isn’t radically different from saving a new file over an existing one on your hard drive.
It takes a little practice. If you’ll forgive mixed metaphors here, it’s also somewhat like bicycling: Where a physical activity involves muscle memory, the pursuit of a positive financial goal can be practiced until it becomes a habit.
Both eventually require less conscious focus once you’ve done them enough. This is the basis of goal-based financial planning. Sometimes referred to as “goal-based investing,” it means identifying your monetary goals and then creating an achievable plan to reach them.
It’s derived from behavioral finance, a subset of behavioral economics. Advisors who use it often encourage creating a personal engagement with your objectives.
For example, rather than saying, “I want to improve my retirement portfolio,” you might say, “I want to retire at age 65, own a boat, and tour Catalina Island with my grandchildren.”
This deeper, more personalized connection adds an emotional aspect that is often the key to writing over a bad habit with a good one. As a result, we believe that even if you have always struggled to stay on course, you may still have the potential to make and keep long-term goals more effectively than you probably realize.
In all honesty, a good part of being an independent financial advisor is seeing the results that goal-based planning makes in people’s lives. So, we’re asking: Are your financial habits getting you where you want to go?
Get Started With an Investment Portfolio Review
Intelligent financial goal-setting is always SMART:
- Specific. It involves an explicit objective, preferably something clear enough to understand should you be distracted with other things, and then return to review.
- Measurable. There’s no guesswork. You can track your progress with specified metrics.
- Achievable. There is nothing wrong with ambition, but try to keep it realistic. A financial goal should always be something humanly possible to achieve.
- Relevant. Does it resonate with you as more than just a number on a calendar? Add details, as necessary, to deepen your connection to it.
- Time-based. You need a specific deadline to try and reach (or beat).
This isn’t just a handy acronym. Aligning with these factors can increase your overall success in reaching your financial goals.
The good news: You don’t have to do all this on your own. ViaWealth advisors use powerful and proven tools like MoneyMind® and HonestConversations® because they help break you out of the mold you’ve been set in.
As a result, you can see your relationship with money more clearly and gain understanding. When you live your life by design, you can break the chains of unconscious habits and embrace a life path that delivers what you most want to achieve.
It is our job to help you find that path and support you in staying on track. It begins with a meeting where we gather details about your values and desires. Next, we develop your independent wealth management plan together.
If you already have a plan, but you have strayed from it—and you are between advisors—we can help. Whether you need investments for rising interest rates or to rebalance your portfolio, we work within your risk tolerance.
Our advisors focus on presenting you with prudent, independent wealth solutions. Come in for a comprehensive financial portfolio review. Whether you need a fiduciary financial advisor in Minneapolis, all you have to do is contact us.