The goal-based financial planning approach is mainly focused on helping individuals and families achieve their specific life goals by creating a financial plan that aligns with those goals. Instead of solely focusing on investment returns or accumulating wealth in general, this approach prioritizes identifying what you want to achieve in life and then developing a strategy to fund those aspirations.

Key aspects of goal-based financial planning include:

• Identifying and Prioritizing Goals: Determining your most important life goals, such as retirement, buying a home, education, starting a business, etc., and ranking them based on importance and time horizon.
• Quantifying Goals: Estimating the cost of each goal and when you need to achieve it.
• Developing a Financial Plan: Creating a roadmap that outlines how to allocate your resources (savings, investments, etc.) to meet each goal, considering factors like risk tolerance and time horizon.
• Monitoring and Adjusting: Regularly tracking progress towards your goals and making adjustments to the financial plan as needed, based on changes in circumstances or market conditions.

This approach ensures that financial decisions are directly linked to what matters most to the individual or family, providing a more meaningful and motivating framework for financial planning.

Source: Investopedia - Goal Based Investing