The Importance of a Holistic Approach to Finances
When creating a healthy diet for your family you look at many things. What does each person need? For instance, if someone is diabetic you would watch for the amount of sugar in a meal or if someone has high blood pressure the amount of sodium. What do they like or dislike eating? What goals do you have? For example, are you trying to lose weight, gain weight, or build muscle? Is the meal balanced? How does it fit into the overall nutritional balance of the day, week, month, and year? As a person ages, their nutritional needs continue to change so the plan for this year may look very different from the plan 5 or 10 years from now. Creating a healthy financial life for you and your family is very similar to creating a healthy diet.
It is important to look at the specific needs of every person. For example, having a disability or medical condition that requires care needs to be taken into consideration when planning. Is it a long term situation or short term? How expensive will the care or equipment be? Does the person need a full-time caretaker? What and how much does insurance cover? Will time off work be needed and how will that affect the overall income? These are just some aspects that can affect your overall financial plan.
What do people like to do? Sports, hobbies, and travel are all interests that can become expensive. Planning for these expenses and knowing how much income can be allotted to enjoying life without sacrificing financial security allows the freedom to relax and have fun while partaking in these activities.
When setting financial goals such as a specific age to retire, paying for a child’s education, or being debt-free it is important to monitor them regularly so that you can make adjustments when needed to stay on track. Knowing where you want to be in the months and years to come will help determine the steps to be taken now and in the future to achieve your goals.
Having the proper balance in your financial life is also important. Paying all your bills on time but being over-insured or overpaying for insurance coverage and not contributing enough to your retirement funds can hurt your overall financial health. Cash management, employee benefits, estate planning, insurance, investments, real estate, goals, specific needs, and taxes are all important aspects of your total financial situation. Each aspect should be considered not only on an individual basis but also from a holistic perspective to determine how each will affect the whole.
Where you are in your life journey is also important when making financial decisions. A young adult has different needs, goals, and responsibilities than someone who is retired. Continuing to evaluate and alter your finances as your needs change is important to creating and maintaining a healthy, stress-free financial life.
At Lighthouse Financial Advisors we understand how important all of these financial aspects are and take a holistic approach to managing to ensure the decisions being made are in the best interest of your overall financial health. After all, our goal is to liberate you from the complexity of finances so you can live prosperously and enjoy the journey.
