A Holistic View of Personal Finance

Like it or not, finances are a part of our lives from the beginning to the end.

We can’t escape money, and we can’t escape payment systems. But what we can do is prepare, budget, save, and spend wisely while taking care of ourselves for the duration of our lives. If we do it properly, we can also prepare and take care of the financial lives for our children and our extended family. We have the ability to create extended, connected circles of financial care that serve us and our loved ones for generations.

This is called such a view is holistic financial planning.

Holistic financial planning is different from normal financial planning in the way it encompasses personal goals, skills, and values into the way we save money. It asks big questions of you, such as:

  • What are your future goals?
  • What are your values and how are they best served financially?
  • What steps do you need to take to pursue your goals?
  • How can finances be used to make you happy and your family secure?
  • How can you plan for life events and their financing?

There are many more gradients and facets, but the most important aspects are the ways our goals are met by the way we save and use money. Holistic financial planning isn’t just about wealth creation or numbers on a page or a bank account, and it isn’t about the benefits of stocks and investments. Holistic financial planning is far more concerned with how those numbers translate to real world, lasting value that speaks to the deepest parts of our psychological needs and life goals. The numbers on the bank statement need to be reflective of your future life choices.

For example, having a child is a huge financial, emotional, and life commitment. It requires the rest of your life and much more money than many people realize before having one. It impacts every part of your life, especially retirement, home ownership, and recreational spending such as vacations and restaurants. You could also save for their college or their schooling, and other expenses that quickly stack up. It can be easy to think about these as discrete life events, separate payments that have to be managed as they occur.

But a holistic view captures this all as one big cycle, each feeding into the other. Every facet of your life is impacted. Your goals and your dreams and desires factor in. If you save a certain amount of money for a child, how does that money defer your dreams of possibly going back to school or starting a new career or business? How does the money you’ll spend over a certain amount of time change your expenses with your spouse or your family? What allocations change as a result of these life choices? And most importantly, how do you gauge what to value more and what to pick?

Such thinking applies to many, many different financial periods and events in our lives. Saving for parental funeral expenses can bother us psychologically and emotionally. While a financial planner is not a suitable substitute for a licensed therapist or counselor, they are able to step in and help you see the value of saving and how that money can give you peace of mind for when the time comes. So much of our anxieties and sadness simply come from uncertainty; a holistic view can help remove the uncertainty and show us a path forward that guides our decisions for the better.

If we’re examining how funeral expenses affect us and our decisions, we can also look at our own estate planning and our end-of-life plans. While this is an uncomfortable subject for many people, it does help greatly to go into it prepared and willing to learn and accept outcomes and possibilities. How does a funeral we paid for stack up against what we want for ourselves? How does the concept of paying for end-of-life management strike us, and how much of that burden do we want placed on our children or extended family? What can we learn from our own experiences with it, and how do we use our financial planning to alleviate known burdens from those we care about?

Similarly, when we look at our investments and our taxes, we might wonder how we can make a difference in the world with our wealth and how we can fund the external things that matter. For example, the money we donate to charities and charitable organizations or causes can have a distinct ripple in the world for the better. We can write it off on our taxes of course, but the most important thing is giving our money to organizations that share our values and will instill those values in the work they do. We have a chance to shape parts of the world for the better based on our values and how we value or money. This is a wonderful opportunity, and one a financial planner can help elucidate in greater detail by sorting through what you prize the most in charitable giving.

Many adults struggle with paying for end-of-life care for their parents, such as nursing homes, hospice, extended care, and the like. We can have complicated feelings about this; holistically, the wheel comes fully around by this period in our life when we’re asked to take care of our elderly parents. There are many possible emotional facets to this (perhaps the relationship with your parents has been rocky; perhaps it doesn’t feel fair to provide for them if you felt they weren’t there for you at various stages when you needed it). While a financial planner can’t be a substitute for a therapist, they can certainly help shape your financial values and take exact stock of what works and what won’t, budget wise.

Marriage and divorce are two of the most financially involved events two people can undertake. While the hope is for the marriage to last forever, in the real world this often isn’t the case, and preparing for a divorce can be a messy, emotionally trying business. It can involve lawyers, reams of documents, living schedules for children, alimony payments, childcare payments, settlements, and a divvying of personal property to satisfy legal requirements for separation. What we give, how we give it, and the best methods of transferring property or money fall into a holistic cycle.

Not all divorces have to be ugly. Many are relatively straightforward events that nevertheless require attention to financial and legal details. Even the simple ones can greatly tax our interior and emotional lives. They can shape and impact our financial outlook and career or educational prospects, our social mobility, our recreation. Understanding the full effects and their ripple throughout our financial lives is key to sorting out the mess from the benefits and seeing the big picture.

Holistic financial planning might also ask: how do you save for retirement? More specifically, how do you save for the things you want to do in retirement? What are the key activities or elements you’ll need to be happy post-work, why do you value them, and how can saving money in certain ways ensure those outcomes? This can require a deep sorting of values and a realistic appraisal of leisure and activity time in the far future, which is where a financial planner can come in handy as both a soundboard and an appraiser of your plans. They can help you crystallize your path and put you on the road to living the life you want at any age.

Other holistic events include:

  • College
  • Investment strategy
  • Taxes
  • Budgeting
  • Life events, both planned and unforeseen

When people think of financial planning and financial advisors, they don’t often picture this sort of scenario. So often the perception is that planning is budgeting, merely numbers on a page. There isn’t always a lot of thought given to a larger picture. But there should be! The larger picture is very important; it shows us our world and how we want to live in it. It can illuminate and inform where before we couldn’t see the forest for the trees. Financial planning, at its core, is about ensuring a happier life and greater freedom for you and your family. We can’t forget that core value while pursuing our goals. Financial planning is a partnership, and one that continues far beyond just the simple, standalone common events.

Willeke Financial Group and its employees, NYLIFE Securities LLC, Eagle Strategies LLC and their affiliates do not offer tax or accounting advice. Please consult your own legal, tax or accounting professionals before making any decisions.