As consumers, we’re inundated with choices every day — from the coffee we make in the morning to the gas we put in our cars, the shoes on our feet or the business attire we wear. But those decisions don’t stop when you stop purchasing consumer items. In fact, they become even more important with your finances. But how do you decipher the impact your financial decisions will have down the road? There’s no doubt that decisions based around cash flow, debt, taxes, insurance, estate planning, investing, and other financial aspects are complicated, but even more daunting is the fact that the wrong decisions can have poor or even disastrous long-term effects on your life. So, how do you stop the snowball effect of poor financial decisions? First, you must determine what kind of lifestyle you wish to have now. Once you know that answer, you’ll be able to properly plan for your future.

By determining the lifestyle you wish to live now, financial advisors can figure out the cash flow you’ll need to live that way. And by adjusting for inflation, they’ll be able to determine the cash flow you’ll need to continue your current lifestyle into the future as well. It’s that number that people need to focus on as it will act as the goal to which to follow a road map to the amount of wealth you need to accumulate or preserve. Once you know what you need to make for the future, or the wealth you need to protect, you’ll be guided on how much your financial situation needs to change.

Of course, there are many details that make these future plans much more complicated. Not to mention the added stress of knowing that poor financial choices can lead to you working longer in life, leaving you with less wealth and cash flow, or increasing the risk of your investment portfolio, which is why it’s important to surround yourself with advisors who can help you make better financial choices around a financial plan that lays out the way you want to live now and in the future.

While my book, Master your Cash Flow®, is a great starting point to better understanding financial choices, we firmly advocate surrounding yourselves with people who know your financial plan and can help you realize your financial goals, both in the present and in the future. For more information, visit tswealth.com.