Just as you have unique goals and ideas of success, your definition of “peace of mind” is special to you as well.
Ask yourself what peace of mind actually means. Maybe it’s becoming free from debt? Building an income strategy that means you don’t have to live paycheck to paycheck? Perhaps it’s the ability to leave a sizable inheritance for your children and grandchildren?
Here are a few tips for understanding what finding peace of mind in your financial life means and how you can accomplish it.
The Importance of Long-Term Goals
Consider how your personal values influence your financial goals. The more your goals align with your beliefs, the greater the fulfillment you’ll experience when achieving them.
Keep in mind that we’re talking about long-term goals here, meaning they’re not likely to happen overnight. Achieving peace of mind is a process. Don’t put unnecessary pressure on yourself by thinking you need to beat an imaginary timer. Your goals are your own, and there’s not always a way to “fast track” or “detour” your way to achieving them.
Mindset Is Everything
By focusing on your long-term goals, you put yourself in a headspace that doesn’t allow for short-term distractions. Expenses will likely come up in your life that may feel like a bump in the road, like an unexpected medical bill or costly house repair.
The only thing you can expect is the unexpected, meaning these things are bound to happen. While they’re often out of your control, you do have the power to not let these upsets completely derail progress toward your long-term goals.
Instead of getting stressed about short-term hurdles, keep your eye on the bigger picture. All of your financial decisions today will have an impact on the future in some way, shape, or form. Keeping that mindset with you when considering everyday purchases can help you avoid impulsive overspending. Next time you’re considering a large purchase, ask yourself, “Does this actually serve me and my long-term goals? Does it align with my personal values?”
As you make a continued effort to shift your mindset, try to remember that money isn’t actually the goal. Instead, it’s one of the tools at your disposal that you can use to help reach your goals. You may find it more motivating to picture the goal itself, like a second home or sending your kid off to college, than trying to visualize a dollar amount.
Make Your Money Work for You
Having a budget is a basic piece of financial advice you’ve likely heard repeatedly. But it’s helpful to understand the importance of building — and sticking to — your budget. Having a budget encourages you to stop, think, and be more cautious with your money. It helps you determine if you’re spending money the way you actually want to and if it’s ultimately serving you over the long run.
Think of your budget like having a shopping list before you go to the grocery store. When you go to the store with a list, you’re less likely to impulse buy. In fact, a recent study found that 44% of people who use grocery lists spend less when they use a list than when they shop without one.1 A list, like a budget, helps you feel more focused on your purchases and accountable for your spending.
The Power of Saving and Investing
Again, saving and investing are fairly basic financial concepts you’ve likely been told are important many times. But in terms of achieving peace of mind, they’re powerful tools that shouldn’t be overlooked.
The amount of money and type of accounts you use to save will depend on your age, needs, and goals. But regardless of where and how much, having savings and contributing to them regularly can go a long way in helping you feel financially at peace. For example, you may be saving for your children’s education, a down payment on your dream home, a wedding, or retirement. Whatever your goals are, building your savings is the first step on the path toward achievement.
Investing allows your money additional opportunities to grow. Every investment carries some form of risk, but focusing on the long-term potential over the short-term ups and downs is key to growing your portfolio over time.
Plan Ahead for Your Legacy
There are steps you can take now to help your loved ones carry out your final wishes as you want them. Establishing a robust estate plan and creating open communication with family members are two essential steps in ensuring your legacy. In terms of feeling more at peace with your financial life, planning ahead for your legacy takes one thing off your to-do list while setting your family up for future success. It’s never too early to build a plan.
Take Steps to Relieve Financial Stress
Being proactive with almost anything in life can help you avoid stressful situations or greatly reduce their severity — and your financial life is no exception.
Something as simple as establishing an emergency fund can help keep your financial life on track when sudden and unexpected costs arise.
Another proactive step you can take is to pay yourself first, rather than putting whatever’s left over at the end of the month into savings. Prioritize your savings strategy by contributing to savings accounts like 401(k)s or IRAs, HSAs, 529 plans, etc.
Rather than focus on the financial challenges ahead, try to focus on the opportunities those challenges carry and the solutions you can use to overcome them. In other words, approach life with an abundance mindset. Having a hopeful approach to life means knowing that you have enough money to be okay and that you’re not in a financially dire situation — even when the unexpected arises. Keeping this in the back of your mind can help put these challenges in perspective while reminding you that you’re doing a great job and on track to meet your long-term goals.
Find Your Financial Partner
While there are plenty of things you can do on your own to achieve peace of mind, a financial advisor can be an essential tool in creating a proactive and goal-focused plan. Finding the right financial partner means you have another person there to take the lead, help you make critical decisions, and assure you that things are on the right track.
If you’re looking for a financial partner who understands your needs and can build a custom plan to move you closer to your goals, feel free to schedule a time to talk.