As society becomes more aware of each individual's special needs, techniques used in sociology and psychology are being applied to personal finance as well. Lifestyle financial planning considers a person's desires, dreams, strengths, needs, and goals and fashions them into the overall financial equation in order to bring those goals into reality.

Heretofore, planning has focused on maximizing the accumulation of wealth. Lifestyle financial planning, however, focuses on maximizing the individual's happiness. It de-emphasizes greed and embraces frugality. It also helps individuals focus on realistic goals based on their desires, dreams, strengths, and needs.

Many colleges, universities, and professional schools are implementing lifestyle planning counseling programs to help their students focus on what is important in both their personal lives and careers. Lifestyle planning counselors help students make an inventory of those things in life that are important to them, such as where they want to live, the types of cars they want to drive, and the income they think they will need to support their lifestyles.

The types of things people typically save money for haven't changed, but the way they look at them has. For example, people still need to save for the down payment on a house, but perhaps a smaller house. Buying a car? Consider a previously owned luxury car or a lower-quality, brand-new one. Or, when planning for college, it may make sense to go to community college for two years and then finish the degree program in a more prestigious school—it will cost a lot less.

Very often life throws us curves. How many people do you know who wish they were in a different occupation or profession? What if your personal relationship doesn't work out? How will a breakup, separation, or divorce affect your lifestyle? Can you be financially prepared for it? You should be. Lifestyle planning can help you reevaluate your personal choices and make decisions that will help you be happier and more productive. What about retirement? When planning for retirement, you need to consider what you really want to do. This will determine how much you need to save and how frugal you will need to be in order to plan for your retirement.

The first step in lifestyle financial planning is to make a list of your desires, dreams, strengths, needs, and goals. Then identify the financial goals associated with them. It might be helpful to use a written questionnaire to organize your thoughts. Questions such as "Where would I like to live?" "What kind of car would I like to drive?" "What kind of clothes do I like to wear?" "Where would I like to work?" and "What do I like to do for entertainment and recreation?" can all be helpful in pinpointing the lifestyle for which you need to plan. The answers to questions like these will help you define and set reasonable financial goals.

The lifestyle financial plan is how you will acquire the money necessary for each of your goals. Money can come from earned income from work, or earnings on your investments. As in all financial planning, you must guard against inflation, taxes, and risk of loss of income due to death, disability, or legal action. You must also consider how to invest savings to help maximize growth while minimizing risk of investment loss over the investment time horizon to your goal.

You can begin to implement your plan when you start to earn money and save for your goals. Your goals can be short-term, intermediate-term, or long-term. You should select investments according to the risk and return you need in order to achieve your goals. Generally, short-term goals require the safest investments while long-term goals can be invested more aggressively.

But you're not done yet. You should have mileposts along the way to see how well you are progressing. When you made your plan, you decided how much money you would need at a specific point in time in order to achieve your financial goal. A milepost measures how far along the route you are to achieving your financial goals. In some instances, you will be ahead of schedule while in others you may be behind schedule. Or your goals may change. Remember those curves? Be prepared to stop and reevaluate your plans and change direction if necessary. It's your life, so live it the way that best meets your desires, dreams, strengths, needs, and goals.