Contrary to the title of this article, I am not actually a Navy SEAL. Far from it, truth be told. But on a couple of occasions, I’ve had the privilege of hearing Navy SEAL Rob O’Neill discuss how they handle stressful situations and achieve successful outcomes. I thought I would share some of his words of wisdom and how one might apply his thoughtful approach to managing personal finances. Here is how the SEALs are trained to manage stress:
 

1. There is no perfect plan, except in the planning room.
2. Respond to a situation, do not react.
3. Keep it simple.
4. You can only control or have impact on things within the wingspan of your arms.
5. Long-term goals are achieved through countless small steps and victories — celebrate them.

As we start 2021, I’m confident that we can take a cue from some of the most strategic, disciplined folks around and apply their thinking to financial planning for the new year. Focus on taking the small steps below to help you accomplish your long-term goals.

No perfect plan.
 

Revisit your financial plan — yes, you absolutely should have one. Life is fluid and your plan needs to change with it. If your goals have remained the same, be sure that you’re achieving the incremental victories that will lead you to your ultimate goal. If Murphy’s Law has reared its head, perhaps you need to reprioritize the goals. Remember — there is no perfect plan, but it’s important to adjust your financial strategy to align with the changes that may come your way.

Respond to a situation, do not react.
 

Reacting is based on emotion, while responding is rooted in emotional intelligence. A reaction may result in a positive or negative outcome, whereas a response is engineered to produce a positive or negative outcome. Too many times a quick financial decision creates unintended consequences. Survey your options and take time to study the income, expense and tax consequences. Once you have compiled your options to move forward, respond to the situation. More times than not, this will save you time and money in the long run.

Keep it simple.

I am guilty by association. My industry of advisors and planners too often create complex plans to solve a client’s tax, estate, charitable and (insert the word) problems. While many of these strategies are practical and effective, some of the best planning is done with basic blocking and tackling strategies, including:

• Make sure you are fully funding retirement and Health Care Savings Accounts.
• Have at least six months of living expenses in cash.
• If you have a potential estate tax issue:
  • Make sure you are gifting annually ($15K person)
  • Directly paying an institution for grandchild education
  • Create Donor Advised Funds

Of course, there are additional opportunities to plan for your financial future. By focusing on the basics, you can ensure that you’ll have peace of mind as you live your life. Be sure to work with your Certified Financial Planner to identify simple ways to address financial security and financial planning for the new year.

You can only control or have impact on things within the wingspan of your arms.
 

Tax laws are always changing. This year will be no exception. You cannot control it, so try not to stress. However, there are other ways to control what’s in front of you and manage your taxes.

• Create a budget and hold yourself accountable. Almost all financial institutions have budget software and expense tracking on their websites. Find one that works for you. Establish your short-term goal for savings and expenses for 2021.
• Take advantage of annual charitable deductions to manage taxes.
• Work with your CPA or Certified Financial Planner to manage your capital gains tax exposure.

Take a minute to celebrate victories.

The road to financial success is typically long, especially with people living into their 90s. When you achieve a short-term goal, whether that means buying a car or a house, taking your dream vacation, funding a college education, selling a business or retiring — take a victory lap! You deserve it. Be sure to slow down and celebrate the small wins along the way – isn’t that what life is all about?
 
The information included in this article is neither tax nor legal advice.


Andy Basinger is a Managing Director at Live Oak Private Wealth. Combining financial planning expertise with superior client service, Andy plays a critical role in helping Live Oak Private Wealth clients achieve their financial goals. Andy joins Live Oak Private Wealth with more than 18 years of experience in wealth management and brings strong financial planning and investment skills. Before wealth management, Andy worked in corporate and investment banking and understands the unique challenges facing private business owners. He enjoys working with them to devise a plan for what is often their most treasured asset. Andy received his MBA from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill and his Executive Certificate in Financial Planning from Duke University. In addition to his CERTIFIED FINANCIAL PLANNER™ designation, Andy also has his life and health insurance license. Andy and his wife, Ashley, have three children and enjoy traveling together as a family. He also enjoys golf, snow skiing and running.