Financial Life Planning = Financial Planning Done Right

Since I began my career as a financial planner, I have always been searching for the best way to help clients plan and take action so they can live their ideal life.

Traditional Financial Planning

Traditional financial planning was where I started since that is how I was trained.  In traditional financial planning, we look at two main areas; Your Life and Your Money.

Your Life

We chat about your life as it is today and ask you questions about where you want to go.  Most clients say things like: I want to retire when I am 65, I want to send my kids to college, I want to buy a house, I want to save on taxes, etc.  

Your Money

We dive deep into your financial life.  We look at your investments, tax returns, insurance, balance sheet, cash flow and estate plan.  

Your Money + Your Life = Financial Planning

With an understanding of the two, we build a plan that helps you achieve your goals.  The funny thing is, we would lay out a plan with action items and far more often than I expected next steps wouldn’t get done.  
When this would happen I used to think that meant the client was a bad client.  What I realize now is that they are not a bad client at all. We simply had not clarified what is most important to them.  
So now, in addition to traditional financial planning, we add one more area of focus.

Your Vision / Values

What I didn’t realize when I used to ask clients for their goals is that most of us, including myself, have never really thought about what we really want out of life.  Once you do, there is a clarity that makes it easier to decide what to do in your financial life and weigh your decisions.

Your Life + Your Money + Your Vision / Values = Financial Life Planning

Now with clients, we start our relationship by have structured conversations through the EVOKE process, more on EVOKE in our next post, in which we discuss what is most essential to them in their lives, they prioritize what is most essential, and then we look at what could possibly get in the way.  

The most fascinating thing about planning this way is that while we still employ the same technical expertise, the solutions we come up with together are much more nuanced and tailored to the client than the textbook answers we used to employ.

It’s not hard to make a decision, once you know what your values are. – Roy Disney

While my sample size is too small to say anything definitive, I do believe that clients have greater follow through now that we are building their Financial Life Plans so they can live their vision of a fulfilled life as quickly as possible.  Since everything ties back into this plan and they have a clear vision, they act.

If you are interested in finding clarity for yourself you can start by thinking about what is most important to you in your life.  Write it down. Then assume that this is in your life. It’s there. Anything else? …. Write it down and repeat until you have nothing else to write.