It is a common misconception that financial planning is primarily about getting help in making and sticking to a budget or managing a retirement portfolio. While those important tasks can be a part of the services a financial planner provides, you might be surprised to learn that much of the work financial planners do is helping their clients define and refine their personal values and goals for their lives. As you and your financial planner better understand your short and long-term goals, making decisions about how to align your finances with what you want out of life becomes easier.
Goals: A Love-Hate Relationship
Goals are great – they give us a guiding star to follow, inspire personal growth, bring clarity to a desired outcome, and provide a catalyst to overcome obstacles, missteps, and setbacks. Setting goals and working towards them helps us define what we really want in life. Goals also help us prioritize our lives and how we go about living them.
However, many people are reluctant to set goals. Perhaps they have failed in the past and have become disenchanted. Or perhaps setting goals creates too much internal stress by turning a dream from a ‘possibility’ to a ‘must do’. Others might struggle with a fear of failure or even worse: perfectionism.
Taking Time to Reflect
A great set of questions that some financial planners use to help people discern their life’s goals are based on the Three Kinder Questions (George Kinder is the father of the life planning movement). This line of questioning essentially helps you design your ideal life and then helps you distill and prioritize the things that are most important to you. It’s somewhat of an involved process – maybe even an emotional one – but for most it’s a very effective way to help people visualize and plan very meaningful life goals.
Take for instance a goal I often hear from clients: I want to make a lot of money. While this is a common goal and isn’t, in itself, a bad thing to want to work towards, making a lot of money isn’t necessarily a goal that will make you happy in the long run. Ideally, we want our life leading our money, not our money leading our life. If we let our money lead our lives, we may find ourselves overspending, getting into consumer debt, or locked into jobs that make us miserable.
One way to clarify your personal goals is to reflect on your core motivations. The essence of our motivations – the ‘why’ – is typically buried a little bit deeper than your initial answer. I might ask a client who wants more money to reflect on their motivation for wanting to have more money. For many the purpose of money is to give us the time to do what we want, when we want, with the people we want. If it is true that ‘time is money,’ then, in a sense, money is also time.
Aligning Your Money with Your Goals
Taking a proactive and deliberate approach towards aligning your personal goals and finances will provide you with a sense of clarity and calm regarding your future. An essential first step is to get specific with the amounts and dates of your new values-based goals. This will assist you in setting appropriate short and long term goals as part of your financial planning.
That said, financial planning can be a bit of an art as well as a science. You might start out with a goal of retiring at 65 with $250,000/year in retirement income, but there are going to be twists and turns along the way. Your life plan will probably change over time. This is another area where a good financial planner can help you reassess goals and keep you on track over the course of your life’s journey.
Work with a Financial Planner to Refine and Align Your Goals
Financial planners have a wealth of professional tools that can help you understand your current situation, create a map towards your goals, and measure your progress along the way. These tools can also help you sort out the cost/benefit of planned actions and alternatives actions, and the ways to most efficiently help you prioritize and achieve new goals. At WHWM, we can help you clarify your life goals and align them with your finances by providing a roadmap to help you achieve your goals while providing you with the support and guidance needed along the way. Get started on your financial life goals. Schedule your complimentary, no-obligation 30-minute consultation with WHWM today.
Walnut Hill Wealth Management, LLC (“WHWM”) is a registered investment advisor offering advisory services in the State of Texas and in other jurisdictions where exempt. The information provided is as of the date indicated and subject to change.
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