How To Pivot Your Financial Plan When Your Goals Change

When you were younger, do you remember someone asking what you wanted to “be” when you grew up? Your answer was likely something fanciful, like a princess or astronaut.

But your goals may have changed over the years. Maybe you decided to be an engineer instead of an astronaut or a teacher instead of a princess.

The moral of this story is that your financial and personal goals will likely change throughout your life, and that’s normal!

At some point, you may find yourself in a situation where you decide to start a family, go back to school, purchase a second home, save for a wedding, or have unexpected medical costs.

How do those events change the way you make and reach your financial and personal goals?

Key Takeaways

Money isn’t necessarily the goal; it’s the tool that helps you achieve your goals.
You can change your financial plan while not drifting from your long-term goals.
When unexpected financial costs or life changes arise, lean on your values to maintain financial alignment.

Not If, But When

Whether you like it or not, life doesn’t usually go how you plan. Because of that, it may be difficult to make long-term plans. The question “where do you see yourself in 5 years?” isn’t easy to answer because what you prioritize now could be completely different in 5, 10, or 20 years.

How can you mentally and financially prepare for these shifts?

Don’t Be Afraid of Change; Welcome It

Humans are creatures of habit and usually don’t like change!

You know the feeling of driving your usual route to work only to find there’s construction. That slight change can disrupt your morning. Or when your office switches coffee brands. You can taste the difference, right?

If those small changes can impact your life, imagine what larger, more financially focused changes can do, like getting a new job, buying a house, receiving an inheritance, replacing a car engine, etc.

While you can’t plan for everything, it’s important to expect change when making your long-term financial and personal goals. Go into goal setting with an expectation for evolution. If you have the mindset of “when” and not “if,” you give yourself the grace to change your goals when necessary. Plus, you’ll be more prepared for change when it happens (which is half the battle)!

Your Values Lead The Charge

Your saving and spending goals should align with what matters most. Were you saving for a European vacation only to find that you’re expecting twins? You may value adventure and family, but at this time, family takes precedence. And that’s okay!

But this change doesn’t mean you have to leave your trip of a lifetime in the dust—you may just need to budget for a couple of extra tickets. Your immediate needs and timeline may have changed, but the values that drive them haven’t.

Your core values play a significant role in developing your long-term goals. They are the “why” behind what you do every day and guide your habits and behaviors.

And values play a critical role in your financial journey. Say you hold great value in your community. To spin that value into a financial goal, you decide to save enough money to donate to your church every week.

Values give us the blueprint behind why we do what we do. And when we live our lives in line with them, we feel fulfilled!

For example, early in your career, you might have placed value on freedom and travel. But, now that you have a family, you place greater importance on being present in their lives, which could translate into finding a job with better pay, benefits, or work/life balance.

It’s important to remember that your finances are the tools that help you achieve your goals. They’re not the goals themselves. When your plans change, be creative and use your tools differently.

Take Steps, Not Leaps

It’s easy to let the excitement about the present put blinders toward the future. So try to avoid letting your new or adjusted goals derail your long-term plan. Rather, modify or pivot your short-term goals to better reflect what you need now while maintaining momentum toward long-term financial success.

For example, if you’re saving for a wedding, you might be tempted to push all of your funds in that direction (weddings aren’t cheap). But saving for your big day shouldn’t come at the expense of your debt and retirement savings.

The other thing you’ll need to consider is what to do with your next dollar after you cross a goal off your list. Say one of your long-term goals was to pay off your student loan debt.

When that day comes and you send off that final payment, how will you use those funds moving forward? Will you push them toward a Roth IRA? Or, do you start moving towards another long-term goal of purchasing a home and saving those funds for a down payment?

The answer lies in your values, goals, and priorities. And we can help you create a plan that makes sense.

How To Pivot Your Plan

One of the best ways to start adjusting your goals is by taking a financial inventory.

Start by determining base contributions in core long-term planning goals, like your retirement savings, debt payments, and emergency fund. From there, use your estimated income to determine where to put any leftover funds.

This number will be what you could allocate towards your short-term needs, like saving for a wedding or paying off a hospital bill. And you can adjust them as necessary to accommodate any income increases, bonuses, inheritances, etc.

This method allows you to continue progressing toward your long-term goals while accommodating your short-term needs.

If you’re unsure where to prioritize your funds, a financial advisor could be a great resource.