Setting Your Sites: Five Targets for Your Financial Future

Financial Planning isn’t just about saving the most money, getting the highest return, or having the most appropriate insurance. It’s also about using your financial resources to enrich your life. After all, you have worked your ass off for all this money – what the heck are you going to do with it?

Recently, I wrote about being S.M.A.R.T. with your goals. Today, I want to take that a step further by walking through the different types of goals that shape your financial well-being.

Foundational Goals – The Basics

There are five types of goals, each with their own subcategories. The first group is Foundational Goals, which focus on security and day-to-day stability, usually with a time horizon of less than three years.

These include Emergency Goals – an essential part of the financial planning process. Strategies like maintaining adequate insurance coverage and maintaining a proper emergency fund make up the core of your Emergency Goals. Another category of importance is Stability Goals, which center on creating predictable cash flow and reducing or eliminating high-interest debt.

Finally, there are Short-Term Lifestyle Goals, which cover upcoming needs and wants like vacations, home maintenance, vehicles, furniture, and household upgrades.

These are typically the first goals a financial advisor will address. When your foundation is solid, you’re free to make bigger, more meaningful financial decisions.

But when this area is ignored, even a small emergency — a tree on the roof or a breakdown on I-5 — can throw everything into chaos.

Wealth Building Goals – Time to Save

The second type of goals are Wealth Building Goals. They are goals that address asset accumulation, balancing risk, and long-term strategies. The time horizon for these goals will usually have the largest spread from around 5 years to over 30 years. This, again, is a large part of the financial planning process.

Within these goals are Saving & Investing – considering things like contributing to an employer retirement accounts, funding an IRA, saving for a down payment, or managing a taxable investment account. For most people, this will become the basis of your retirement strategy. It’s not just about how much you invest - it is about where you invest it.

There are also Career-Based Goals that include growing your income, building new skills, or starting a small business. These goals begin to take shape as we sit at work thinking about how to make more money – that is the beginning of Career-Based Goals.

Major Purchase Goals are just what they sound like – major purchases. This can be anything like buying a new home, saving for your children’s education, travel, or upgrading your lifestyle. It’s important to remember that these are often shorter-term goals that you are looking to execute prior to retirement. Then, of course, there are Retirement Goals, like when do you want to retire, what do you want your spending to look like – just generally building towards financial independence.

These are the goals most people think of when they picture “financial planning,” but they’re only part of the picture. As wealth grows, people often begin thinking about the impact they’ll leave behind — which brings us to Legacy Goals.

Legacy Goals – The Leftovers

Once we’ve built the foundation and are growing wealth, many people naturally begin thinking beyond themselves — which leads us to Legacy Goals. These are goals that give you meaning, have an impact on the world, and support your values. These are long-term goals that can be set out for more than 20 years.

They include Transfer Goals – goals that prepare for the transfer of wealth to your children, address fair distribution, and prepare for any kind of special needs or dependent care. When we address these goals ahead of time, we can make sure that your wishes are “written in stone.” In my opinion, clients tend to put these goals off for too long. Having a well-conceived financial plan requires you to address your Transfer Goals early and often.

Another important part of Legacy Goals includes Charitable Giving Goals. Setting up scholarships, long-term recurring giving, community giving, or religious-based giving are at the core of this type of goal Then there are Value-Based Goals — goals tied to your family’s financial values, traditions, or causes that are meaningful to your identity. This can be different for each person, so it’s hard to list them all.

Once your legacy is shaping up, the final piece involves the behaviors that help you stay consistent and confident.

Behavioral Goals – You Can Do It

The last set of goals that should apply to everyone are Behavioral Goals. They are underrated and overlooked but are life-long goals that can be started at any point. Good financial advisors can play a major role in the success of these goals. Having an accountability partner while trying to maintain or develop these skills is a proven winning strategy.

The first part is Financial Behavior Goals: these are important ones, so pay attention here – savings habits, avoiding emotional investing, increasing your financial literacy, and building confidence in your financial decisions. This is empowering clients to make informed, financial decisions. A good advisor can’t make choices for you — but they can present your options clearly, help you understand the implications, and give you the confidence to make decisions you feel good about.

The second part is Communication Goals. These can make people uncomfortable but can be incredibly rewarding if handled well, especially within your family. They include talking openly about finance, coordinating with your partner, and teaching your children the importance of financial literacy.

These Communication Goals can absolutely improve your Behavioral Goals, so they work hand in hand. These goals are a major focus of mine, and I could talk for way too long about them. Just know, if you work with Sherwood Wealth Management, we will sharpen these skills. If you ever want a recommendation for resources regarding these goals, just send me a message, and I will hook you up.

Business Goals – Business Transitions

Finally, we have Business Goals. These are typically for people with career complexities, business owners, or farmers - anyone that has built something that provides them with financial benefit. It includes things like continuity planning, succession, buy/sell agreements, and creating business retirement plans. The time horizon on these goals will vary depending on the specific situations, but if you have one of these situations present in your life, it needs to be addressed immediately.

What kingdom was ever successful when there was no defined heir – I am sure you have seen enough Game of Thrones to know succession matters.

With all these types of goals in mind — foundational, wealth, legacy, behavioral, and business — you now have a full map of the territory.

The Sherwood Difference

There you have it – a solid framework to start putting together your own goals. If you haven’t already, make sure you read my previous post about making S.M.A.R.T. goals, so the goals you set can be achieved. I will also post an outline that makes the structure a little clearer – you can look for it in the documents portion of my website. At Sherwood Wealth Management, goals are at the heart of the planning process - they tell us why  we’re saving, investing, and preparing. If you reap what you sow, your goals are the harvest.

If you want help building your own goal framework — or just want a sounding board — reach out anytime. Helping people turn financial intention into real-life outcomes is what I do.