What Should You Include in a Holistic Financial Plan?

By Adam Olson, CFP®

Managing your money can be complicated, especially in today’s environment. Between taxes, investments, insurance, and trying to stick to a tight budget, it’s easy to feel overwhelmed. With the economy being so unpredictable, we worry about how we can help keep ourselves and our loved ones financially secure long into the future. That’s why financial planning is so important.

Financial planning is the process of managing your expenses and savings to meet your financial goals. Holistic financial planning, which anyone can use because it is a tailored approach, takes this a step further. It’s a necessity for anyone looking for stability and growth in today’s unpredictable world. Unlike traditional financial planning, which typically focuses on only investments and insurance, the holistic approach takes a 360-degree view of your finances, covering everything from taxes to legal considerations to family dynamics.

In the current economic environment, marked by uncertainties, inflation and rising debt, holistic financial planning is more relevant than ever. In fact, about 20% of Americans aged 50 and more haven’t stashed away any retirement savings at all, and a significant 61% are feeling the jitters about their future finances.⁽¹⁾

These challenges underscore the need for a professional who can serve as the CFO of your financial household AKA your “financial quarterback”—leveraging expertise to guide you in creating a financial plan that aligns the various aspects of your life with your financial well-being.

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Plan to a holistic financial plan

A strong holistic financial plan must include these key ingredients:

• Cash flow management: Provide a clear picture of your income, expenses, and net worth to create sustainable budgets.
• Tax planning: Stay ahead of proposed, current tax laws and prepare for future changes.
• Asset and income protection: Help guard against risks like health issues or long-term care costs.
• Estate and legal documents: Ensure assets can smoothly transition to the next generations and make certain you have the proper legal documents (e.g., last will and living will) in place.
• Tailored investment strategies: Develop a personalized investment plan that aligns with your specific goals.

Understanding your cash flow and net worth is a foundational step because it allows you to see how your overall spending and savings are helping (or hindering) you from reaching your financial goals. For instance, having a positive cash flow means you can save and invest extra money every month for your future. Net worth is how we track how your wealth is growing.

Next, we consider various ways to help protect against the uncertainties in your life—death, disability, liability, or unexpected health costs.

Depending on your needs, you may decide you’d like disability insurance, life insurance, umbrella liability policies, or long-term care coverage as part of the plan. You have to safeguard your paycheck and the ones you love before you start to save and invest for the future.

Once these protective elements are in place, traditional financial planning strategies come into play, with a focus on investments and future growth. During this process, your financial professional will work with you to set clear guardrails to help keep spending, saving, and investing aligned with your values and goals. The good news? Those goals can change. A good financial plan is constantly evolving based on your needs and wants. That is why it’s imperative to meet with your advisor on a regular basis throughout the year.

Realistic goals over generic strategies

Many financial professionals often resort to providing general solutions rather than tailored advice. As a result, people are frequently encouraged to purchase investment products that claim to suit all demographics, income brackets, and age groups. The truth is that one size doesn’t fit all; when it comes to financial planning, it never has and never will.

The essence of a holistic approach is that it is not about a single investment product or strategy; it’s about working with your advisor to align your values and goals with strategies to help you reach those goals. Personal finance is more personal than it is finance. A suitable financial plan evolves from a deep understanding of the individual’s unique circumstances, and that can be done only by working with a financial professional on a personalized plan.

Another common mistake is clients’ tendency to set unrealistic expectations. This is a strong reason why it is important to find a financial professional who can help you create a realistic, flexible, and adjustable plan.

Remember, a good holistic financial plan is one that you can stick to.

Tough conversations

In a holistic financial planning discussion, you’re not always going to like what you hear – finances are personal, and personal feelings are a critical piece of the puzzle. Be prepared to be vulnerable. Whether it’s financially cutting off adult children or delaying your retirement date longer than you hoped, your advisor will help you face tough decisions through real conversations. If done properly, these conversations are difficult but honest. From a financial professional’s perspective, the guiding principle for such discussions is not to say what the client wants to hear but what they need to hear.

Powerful advantage: “The Vault”

One often-overlooked benefit of holistic financial planning is centralization—which essentially means having all your important documents such as bank accounts, insurance, and legal papers—neatly organized in one central location. I call this “the vault.”

In this case, the central location (the vault) is your financial professional and their software system which maintains a comprehensive record of accounts, insurance, and legal documents. This helps provide you and your beneficiaries with peace of mind for unforeseen events. It is a simple yet powerful advantage.

With a centralized plan, if something happens to your spouse and you don’t know where the joint assets are located, there’s one call to make, and everything is accounted for. It helps in making informed decisions quickly when opportunities or challenges arise, providing you and your beneficiaries with peace of mind for unforeseen events. It is a simple yet powerful advantage.

Life happens

A good financial plan evolves with your life; it isn’t something you set once and forget. Much like a football coach tweaking their strategy at half-time, we make adjustments as needed. The plan should be reviewed at least annually to account for changes in tax laws, inflation, or personal circumstances.

In the best-case scenario, a financial professional will conduct three meetings annually with clients:

• Meeting 1: Review and monitor goals, along with integration
• Meeting 2: Review your protection strategy and tax return
• Meeting 3: Review your portfolio’s risk and the investment strategy

These sessions are designed to revisit objectives, assess progress, and adapt plans as necessary. The integration meeting, for example, may include a discussion about how your goals and values align with your current budget and debt management.

Of course, it is important to report significant life changes or financial events between scheduled meetings. You should reach out to your financial professional in the event of a health diagnosis, major expenses, or changes in family dynamics, among other things.

Executing the plays

So, assuming we’ve decided to work together, how do we put your plan into action? Let’s break down the planning process and what you should expect from your financial professional.

1. Kick-off meeting: Start by getting to know each other and understanding your financial goals.
2. Gathering the playbook: Collect all financial documents to strategize effectively.
3. Analyzing “the field”: Review your financial status to identify necessary adjustments.
4. Executing the plays: Develop a plan to achieve your financial objectives and execute the plan through actions like saving and spending wisely.
5. Half-time adjustments: Make ongoing adjustments to ensure success.

Here’s the bottom line: Holistic financial planning is about more than just numbers. It’s about building a more secure, adaptable plan that considers every aspect of your financial life. With a tailored approach, regular reviews, and centralized resources, we can help you score financial touchdowns and tackle life’s uncertainties with the assurance that your financial future is more secure.

Find a financial professional near you.

About Adam Olson, CFP^®  

Adam is a Certified Financial Planner^® who is passionate about educating clients about all things personal finance. He has written several books on these topics, which are available here. In addition, Adam runs a podcast and a YouTube channel.

Adam and his team of seasoned financial professionals have physical office locations across the United States to serve clients in person. No matter where you live, they can help you create your personal holistic financial plan.

They are experts in helping individuals and families with all aspects of their financial lives, including financial planning, investment management, life and health insurance, and home and auto insurance.

Adam lives in Norfolk, Nebraska with his wife Katie and four boys, Hudson, Kiptyn, Tate, and Spencer. When he is not helping clients reach their financial goals, he enjoys hunting and fishing, coaching the boys in sports (soccer, wrestling, basketball, flag football), and spending time at the river.

Footnotes:

[1] AARP, 1 in 5 Americans Ages 50+ Have No Retirement Savings and Over Half Worry They Will Not Have Enough to Last in Retirement, April 2024

[2] Society of Actuaries, Impact of Inflation in Retirement – Survey Findings, September 2024

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

All investing involves risk, including the possible loss of principal, and there can be no assurance that any investment strategy will be successful.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.