Balancing Emotions with Goal-Oriented Financial Planning

By Michelle Clary aep® CFP®, ChFC®, CLU®, RICP®, CEO & Senior Wealth Advisor for Piton Wealth

We humans, I once read, learn fears as we age (except for two innate fears, of loud noises and of falling), and in my case I learned a fear of heights. Every time that I go downhill skiing with my family, the ride upwards on a chairlift reminds me of this acquired fear. And yet, without the willingness to experience the anxiety that attends being suspended dozens of feet in the air, I would never experience the exuberance, the sheer splendor, of skiing in brilliant, freshly fallen powder.

This reward of splendor, the exhilarating journey down the slope, requires constant balance and stability, but the path to the slope calls on me to work through my fear. The same flow of emotions commonly faces people when they are managing their money. Fears about money mean that emotions become unstable and out of balance.

So let’s hone in on stability and balance. Let’s not say that financial instability breeds emotional instability. Let’s say stability and balance are the path, and your goals are how your orient your stability and balance.

This is true equally of money and emotions. Imbalance in one does not cause imbalance in the other. Lack of orientation toward your goals is the instability and that puts both money and emotions out of balance. Conversely, maintaining balance in finances or in emotions itself maintains balance in the other, as long as you are aligned with your goals.

Nothing says that this will be easy. This is a year where financial stability and balance prove challenging. Volatility in the markets and inflation, for example, can make it seem, and feel, as if instability is inevitable and increased risk inevitable, but that is not true. You should revisit your plans and make necessary adjustments to offset the instability that would otherwise ensue.

If you are saving for one or more major events, such as a house, vacation, education, retirement or reducing debt, but your expenses are rising because of inflation, do not abandon those goals. Update your financial plan. It may well mean extending the time frame of a plan or scaling down the goal, but maintain a reliable balance of what you can contribute to those goals and what you will have to spend. It can also be reassuring to plan to readjust more often than you would otherwise. You do not have to dread updating your financial plan, if you keep sight of your goals and remain committed to balance. Every time that you assess your plan, make the updates in line with the balance that keeps you feeling stable emotionally.

Do not be afraid to think long-term and outside the box for ways to achieve balance. In the financial markets, for example, this year has seen volatility and downturns, but our guiding principles as financial advisers have remained stable. No matter the scale of your budget, you can do the same. Look forward in time to your upcoming obligations and income and assess which ones will remain fixed and stable and which ones are subject to volatility. You cannot keep the prices of gas and groceries from rising, but you can look ahead for multiple months and plan how to maintain your budget over that time, rather than stress about how high next month’s costs will be.

In the holiday season, balance and stability can also require extra planning. When you plan your budget, consider the entire holiday season. After the season, plan not just to the end of January but for the months to follow. Plan for your emotional balance, too. The holiday season might bring times, events and people that prompt unsettling emotions, but you can be sure that the season offers occasions for peaceful and celebratory emotion.

Let those opportunities for splendor balance out others. A few moments of splendor can offset a great deal of other experiences. Those moments can restore balance and even lift you to where you find that you are closer to your goals than you planned or realized, just as making the way through nerve-wracking heights leads to rewarding exhilaration down the slopes.

This article appears in our Money section which is generously sponsored by Piton Wealth.