How Building a Home Proved the Power of Planning

Over the past year, many of you have heard me talk about building my first home. Now that I’m finally nearing the finish line, I’ve had time to reflect on how much this journey has reinforced one of the most important principles of financial planning: matching your money to your goals.

When my wife and I set out to build this home, we knew we’d need more than just the funds to cover construction and closing costs. I also had to keep a healthy cash reserve - money that wasn’t invested in the market, set aside for the unexpected. Delays, cost overruns, and last-minute decisions are par for the course when building a home, and having quick access to liquid funds was essential. That flexibility gave us the confidence to move forward without derailing our long-term financial goals.

This same logic applies to many life events: a big vacation, a car purchase, or even buying your own home. If a financial goal is short-term, something you’ll need money for in the next year or two, it makes sense to keep those funds in cash or very low-risk holdings. Sure, you might miss out on higher returns the stock market could offer, but you avoid the risk of needing to sell investments at a loss if the market turns against you at the wrong time.

We often recommend clients think of cash as a safety net. Especially for those approaching retirement, or already retired, keeping one or two years of living expenses in cash or short-term reserves can be incredibly valuable. It gives you the ability to weather market downturns without tapping into your portfolio at an inopportune time, when selling could lock in losses or trigger higher taxes. This cushion buys you peace of mind and helps protect your long-term investment strategy.

Likewise, if you're expecting to use your portfolio to fund something in the next few months, but the money is fully invested in the market, it might be time to reassess. Funds earmarked for near-term needs should be easily accessible and not at risk of short-term volatility. A key part of financial planning is aligning your money with your timeline. That’s how we help you avoid painful surprises and make sure you're never forced to sell an investment at the wrong time.

Ultimately, what got us through two years of budgeting, decision-making, and uncertainty with this house wasn’t luck, it was having a financial plan that kept us focused. If you're reading this and a major expense is on the horizon, or if you're feeling a bit stretched on your cash reserves, it may be a good time to reach out. Let’s talk about how to protect your goals while staying invested for your future.