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Holistic Approach to Financial Planning

Posted on Thursday, August 24, 2023
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by AMAC, D.J. Wilson
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What it means…

A financial plan is a comprehensive approach designed to manage money. It involves evaluating an individual’s current finances and customizing a plan to increase investment options. People can create their own financial plans or individuals may choose to work with a financial planner to achieve economic goals. The latter provides the benefit of an expert in the field, so it is often preferred. Holistic planning thoroughly looks at one’s entire financial picture and includes short and long-term goals. However, the holistic approach to financial planning begins with a top-down approach. Let’s explore more.

Traditional vs. holistic financial planning

Traditional financial planning starts with the now, for example, how much a person can afford to invest each month to get a return on their investment in the end. Whereas a  holistic financial plan begins with focus on one’s long-term goals. While both eventually may cover the same topics, such as retirement investments and Estate planning, a holistic financial planner will begin with your future to help you achieve your goal. This is beneficial as it helps people see the big picture and perhaps reevaluate current spending and investment habits to hit financial targets and make financial dreams come true.

What’s so special about holistic financial planning?

Holistic financial planning focuses on the wellness of one’s personal finances. The old days of plugging numbers into a computer are over. A decent financial planner will look at the big picture and ask questions which are goal-related to understand his or her client’s needs. This approach allows them to craft a plan to set clients on the appropriate path toward achieving those goals. Understanding a client’s desires for the future not only builds a strong working relationship, but it also establishes solid financial objectives necessary for success.

Who does holistic financial planning?

A certified financial planner is a professional who helps individuals and families plan for their financial future. It’s important to make sure that the one you choose understands and adheres to a comprehensive approach to include holistic financial planning. Due to the significant connection between taxes and finances, it’s important for financial advisors to work with tax professionals as needed. If your financial advisor and tax professional are one and the same person, it can simplify the process because they will already know where you stand.

Why is the holistic approach to financial planning important?

Per Investopedia, questions that a holistic financial planner will ask include, “Where am I going?” or “What am I doing?” as opposed to strictly “calculating optimal portfolio allocations.” In addition, it addresses and often “pre-empts certain life events” such as divorce, job loss, or death that can otherwise disrupt life plans.

A recap

The holistic approach to financial planning is a winning method. It provides advantages to clients by taking into consideration their unique financial circumstances and creating tailored plans specifically for them to achieve long-term goals. For more information on the topic, click here.

This article is purely informational. Seek professional financial advice as needed.

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