Some of the things we look forward to most in life come with a pretty significant price tag. Maybe it’s a wedding, a family vacation you’ve been talking about for years, a kitchen renovation, or the opportunity to help your child purchase their first home. These are the kinds of experiences and milestones we work hard to help make possible.
While it’s exciting to think about what those moments will look like, it’s also important to think about how to prepare financially so you can enjoy the experiences without disrupting everything else you’ve planned for.
Start with what you want to accomplish
Most big plans begin with an idea. Then comes sorting out the details. What might it cost? When would you like to make it happen? Will you need the money all at once, or will expenses come up over time? How does it fit alongside the other things you want your wealth to accomplish?
That’s one of the reasons we spend time talking about your life before we talk about your investments. Your Life Plan™ helps us understand what you’re looking forward to, so we can begin preparing for those moments before they arrive.
Give yourself time and options
Whenever possible, we encourage clients to bring significant upcoming expenses into the conversation 12 to 18 months ahead of time. Why so early? Because having time on your side gives us more options.
Depending on your circumstances, we might recommend setting aside money gradually, using existing savings, planning distributions from your portfolio, or combining several approaches. We can also think through potential tax implications, other upcoming expenses, and whether the money should remain invested or be positioned somewhere more accessible.
The goal is to avoid getting to the point where you’re ready to write the check, only to discover that the timing isn’t ideal for how your money is invested. We’ve talked before about why your timing can matter more than the market’s timing. When we know you’ll need a certain amount of money for something important, we can help plan around that timeline rather than hope the markets cooperate when the bill comes due.
Make room for the unexpected, too
Of course, there’s a difference between money you’ve set aside for something you’re looking forward to and money you may need when life doesn’t go according to plan. A family vacation and an unexpected home repair might cost the same amount, but they serve very different purposes.
That’s why we want to be thoughtful about how much cash you have available and what you’ve assigned that money to do. It’s possible to be financially prepared for a wonderful experience without leaving yourself short of resources for an unexpected expense. The Consumer Financial Protection Bureau’s guidance on emergency savings offers a helpful reminder of why keeping money available for unplanned expenses matters.
When your plans involve family
Some of life’s bigger moments involve more than our own financial decisions. Sharing your wealth can be meaningful, but it may also bring additional considerations. If you have multiple children or grandchildren, would you want to offer similar support to each of them when the time comes? Is there an amount you’re comfortable giving without changing your own retirement plans? Would you prefer to provide a set amount and let them make the decisions, or pay for something specific?
There isn’t one right way to approach these decisions. What matters is thinking through how your generosity fits into your larger financial picture and having conversations that help everyone understand what to expect. Sometimes those conversations reveal something important about what you want your wealth to do for the people you care about.
Bring the idea into the conversation
You don’t need a firm date, a detailed budget, or even a final decision before bringing an idea to your advisor. In fact, we’d rather hear about something you’re considering early, while there’s still time to explore your options.
We can help you think about how the decision could affect other priorities. As your plans become clearer, we can adjust accordingly. Planning helps ensure your money is ready when life gives you something more to look forward to.
