What Is Holistic Financial Planning?

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on August 10, 2023

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Financial planning is an ongoing process that involves coordinating the financial decisions of an individual or family.

Financial planning helps you make informed choices that can increase your chances for a more secure future.

Generally speaking, holistic financial planners are planners who provide comprehensive guidance on all aspects of personal financial life. They often offer services beyond just education and advice, such as investment management, estate planning, and insurance review.

Holistic financial planning involves the use of a top-down approach in which all aspects of a person's financial life are considered together.

This type of planning is often recommended for people who have complex financial situations or who want to cover all their bases in order to make the most informed decisions possible.

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Importance of Holistic Financial Planning

There are a few key reasons why holistic financial planning can be so important:

Achieving Your Overall Life Goal

Perhaps most importantly, comprehensive financial planning can help you achieve your life goals.

By addressing all aspects of your financial situation, a planner can help you create a roadmap to achieving your dreams. This can be especially helpful if you plan to retire early or want to send your children to private school.

Since financial decisions often impact other areas of your life, it's important that all your financial goals are in line with one another.

A holistic planner will work with you to ensure that saving for retirement does not get in the way of your goal of buying a home, for example.

Reducing Stress

Money is one of the leading sources of stress in people's lives. By taking a holistic approach to your finances, you can greatly reduce the amount of stress you experience on a daily basis.

A planner will work with you to create a financial plan that is tailored to your unique situation.

Components of a Holistic Financial Plan

A holistic financial plan frequently includes the following components:

Cash Flow De-stressing

One issue that commonly causes stress in people's lives is money not going as far as they want it to.

By hiring a planner, you can get advice on how to address this problem and create a cash flow plan that works for you. This may include creating a budget, developing a debt repayment plan, or investing in a savings plan.

College Planning

A college education is an increasingly expensive investment.

Many parents and students do not feel financially prepared for this expense, but it can be mitigated by taking action early on.

A holistic planner can create a college plan that maps out how to achieve your goals without going into debt.

Asset Allocation

Your assets are everything you own that has financial value. Asset allocation is the process of deciding how to divide your assets among different asset categories (such as cash, stocks, and bonds).

A holistic planner will work with you to create an asset allocation that aligns with your risk tolerance and investment goals.

Investment Strategy

An investment strategy is a plan for how you will use your investments to reach your financial goals.

A holistic planner will help you develop an investment strategy that fits with your overall financial plan. This may include choosing appropriate investments, setting target prices, and creating a timeline for reaching your goals.

Retirement Planning

401(k) plans, IRAs, and other retirement savings vehicles are an important part of most retirement plans.

A holistic planner can help you set up these accounts and make the most of them. They will also help you create a plan for withdrawing money from these accounts during retirement.

Estate Planning

In order for your wishes to be carried out after you die, it's important to have an estate plan in place. This includes creating a will, setting up a trust, and designating beneficiaries for your assets.

A holistic financial planner can help you put together a plan that covers all of these bases and meets your needs.

Insurance Review

It's important to have the right insurance coverage in place, but many people don't take this step because they don't know where to start.

Insurance is an investment in your future, and it can protect you in case of certain events, such as losing your job or having to pay for your child's college education.

A holistic planner will work with you to ensure that your insurance is properly aligned with your financial situation and needs.

Tax Preparation

Taxes can be complicated, and it's easy to make a mistake that costs you money.

A holistic planner can help you prepare your taxes each year, ensuring that you get the most out of your return.

They will also advise you on tax-saving strategies that can help reduce your overall tax burden.

Business and Succession Planning

If you own your business, it's important to have a succession plan in place. This involves creating a detailed plan for how the future of your business will be handled when you're no longer able to keep it going yourself.

A holistic planner can help you create this plan and ensure that everything is taken care of after you are gone.

Benefits of Holistic Financial Planning

The benefits of using a holistic approach when planning out your finances are many:

Simplifying Your Life

By taking a comprehensive view of your financial situation, you can greatly simplify your life.

A planner will help you create a plan that is easy to follow and that covers all of your bases. This can save you time and money in the long run.

Eliminating Guesswork

When you take a holistic approach to plan out your financial future, you can reduce the amount of uncertainty you feel about where you are headed.

By having an expert on your side, for example, you can avoid making poor decisions due to a lack of information or knowledge.

Improving Your Investment Strategy

While it's easy to be overwhelmed by the number of investment options available, a holistic financial planner will work with you to create an investment strategy that works for your needs and goals.

Gaining Peace of Mind

As mentioned above, money is one of the top sources of stress in most people's lives.

By taking a holistic approach and gaining peace of mind about your finances, you can greatly reduce the amount of stress you experience daily.

Final Thoughts

When it comes to financial planning, using a holistic approach is the best way to ensure that all of your bases are covered.

A planner will work with you to create a plan that is tailored to your unique needs and goals.

This can save you time and money in the long run and can help you achieve peace of mind about your financial future.

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About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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