How to Use Financial Planning to Achieve Your Dreams

June 13, 2023

Let’s be honest – most of us have dreams. Big ones, small ones, some we whisper to ourselves and others we shout from the rooftops. But having a dream doesn’t automatically translate into it becoming a reality. Often, the biggest obstacle isn’t a lack of ambition, but a lack of a solid plan – and that’s where financial planning comes in.

It’s easy to get caught up in the daily grind and let your financial future drift away. But financial planning isn’t about restricting yourself; it’s about empowering yourself to create a life you truly want. It’s about taking control of your money so it works for you, not against you.

So, how do you actually do it?

1. Define Your Dreams (and Their Costs!)

Start with the big picture. What do you really want? Don’t just think about money; think about experiences. Do you long to travel? Buy a house? Retire early? Start a business? Once you’ve identified your goals, you need to estimate the financial cost of achieving them. Be realistic! Research the true cost of your aspirations - flights aren't just a few hundred dollars, a house needs a mortgage, and starting a business requires significant upfront investment.

2. Create a Budget (and Stick to It!)

A budget is the foundation of your financial plan. It’s simply a record of where your money is going. There are tons of budgeting methods out there – 50/30/20, zero-based budgeting, envelope system… find one that resonates with you and commit to it. Tracking your spending is crucial. You might be surprised at how much you're spending on things you don't even really value.

3. Prioritize Saving & Investing

Once you know where your money is going, you can start directing it towards your goals. Aim for an emergency fund first (3-6 months of living expenses). Then, prioritize saving for your dreams. This often means investing, even small amounts regularly, can make a huge difference over time due to the power of compounding. Talk to a financial advisor if you’re unsure where to start with investments.

4. Regularly Review and Adjust Your Plan

Life happens! Unexpected expenses arise, income fluctuates, and your goals might evolve. Don’t set it and forget it. Schedule time – maybe monthly – to review your plan and make adjustments as needed. This is crucial for staying on track, especially during uncertain times.

5. Seek Professional Advice (When Needed)

Financial planning can be complex. Don’t be afraid to seek help from a qualified financial advisor. They can offer tailored advice based on your specific situation, goals, and risk tolerance.

Ultimately, financial planning is a journey, not a destination. It's about building a future where your money works for you, allowing you to live a life filled with the things you truly value. Start small, be consistent, and watch your dreams become a tangible reality.