James Clear writes a great weekly newsletter, and in a recent version he shared the following thought about happiness:

“You will never find one answer to what makes you happy. There are many answers, and they change based on your current state.

People need to relax, but if all you do is sit on the beach, it gets old. People find meaning in work, but if all you do is work, it gets exhausting. People benefit from exercise, but if all you do is exercise, it gets unhealthy.

Happiness will always be fleeting because your needs change over time. The question is: what do you need right now?”

That key question of “what do you need right now?” is incredibly important in your financial life as well. Your financial needs change over time, which is why financial planning is always an evolving process:

• You should be investing your savings very differently in your 30’s than in your 60’s.
• Almost everyone needs life insurance if someone else is relying on your income, but you might not need it after kids have moved out and are independent.
• Your estate plan and beneficiaries should look much different if you have no kids, young kids, or adult kids.
• And the way you think about taxes changes drastically if you move from a high taxable income to a low taxable income. Or if you switch from being a W-2 employee to being self-employed. 

So remember that a set it and forget it mindset is not the best way to approach your finances. Our needs are always changing.

Joe Calvetti is a CPA and the founder of Still River Financial Planning, a comprehensive, fee-only financial planning firm that specializes in working with young families and professionals. Click here to learn more about how we work with clients.

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Disclaimer: The information provided above is for educational purposes only and should not be considered financial, legal, or tax advice. You should consult with a professional for advice specific to your situation.