What is Financial Life Planning?

• Financial planning is not all financial.
• Aligning your money with your goals is the name of the game.

We can devise the best strategies on a spreadsheet to grow your net worth to the fullest, but that means little if you do not have a plan for how to maximize joy and contentment with your money.

Financial life planning is all about being intentional with your money – it links life priorities to your financial goals and helps set short-term and long-term objectives the right way.

Being intentional with money means working towards goals that best serve you and lead you to the most meaningful life experiences. The saddest outcome might be having more money than you can ever spend but feeling empty inside day in and day out.

We see that the most joyful and enriching retirements are the ones in which someone has a purpose with both their time and money – that’s what financial life planning, not just a spreadsheet on its own, can deliver.

But how do you and an advisor go about financial life planning?

First, the best plans discover a client’s most important aspirations in life, then financial strategies are shaped around those goals and values. While many advisors focus solely on number-crunching such as budgeting, investments, taxes, and insurance, recognizing the broader context of those important tasks is critical and should be addressed at the onset.

A big challenge, however, is setting the right objectives to match what you want your future life to be like. It’s hard for most people to look inward to probe and imagine their potential future paths.

At Archer, we take clients through a process to help them understand how to focus their financial goals in ways that best serve them and maximize their happiness. Our life planning is all about the process of helping you discover the full life you wish to live and making it happen, no matter where you start.

In order to effectively explore how each person can be intentional with their money and seek out their true long-term goals, we go through several financial life planning questions developed by George Kinder. 

1. Imagine that you are financially secure and that you have all the money you need for the rest of your life. How would you live your life? Would you change anything? What would you do?

This question and scenario help clients put into perspective what they want to accomplish in life. Ultimately, the goal is to uncover what missions, activities, and even people are most important to the individual or couple. Breaking free from the bondage of money often results in realizing that the current course, while perhaps lucrative financially, leaves something to be desired from a relational perspective. We see that some folks want to devote more time to exciting adventures while others want to calm down from a fast-paced life of obligations. 

When answering question one, you should let yourself go. Don’t hold back on your dreams. Finish by writing down what you will change in your life and how you will do it.

2. You visit your doctor who tells you that you have only 5-10 years left to live. The good news is that you won’t ever feel sick. The bad news is that you will have no notice of the moment of your death. What will you do in the years you have remaining? Will you change your life, and how will you do it?

Facing a decision today has so much saliency versus imagining it in the future. You might recognize that waiting for “someday” to experience an awe-inspiring excursion, embark on a mission-driven career, or even mend a broken relationship is not acceptable. The thing is, we do not know how much time we have left, and that all we have earned could be taken from us without notice. With question two, it’s also common for people to stress less about their current troubles, maybe those at work or with other trite near-term tasks. 

3. This time your doctor shocks you with the news that you have only one day left to live. Notice what feelings arise as you confront your very real mortality. Reflecting on your life, on all your accomplishments as well as on all the things that will remain undone, ask yourself: What did I miss? Who did I not get to be? What did I not get to do?

Bringing mortality to today makes clients further their journey to discovering their true values and priorities. This is where life planning hits home and when individuals might finally recognize that money is a means to an end, not the goal itself. Question three is related to what people on their deathbeds say – they often wish they had spent more time with loved ones and taken more exciting, life-enriching risks rather than putting in extra hours at the office. 

Along with the Kinder Questions, we pose other open-ended goal-setting questions so that clients can pinpoint specific action items. This item set is more financial in nature, but they are meant to connect people’s priorities with where their money is going. 

For example, we want to know what a client’s favorite vacation spots are and how much they budget for those trips. Other cash flow questions include details about car buying and home improvement projects along with plans to upsize or downsize. Also crucial are family needs such as caring for a loved one and long-term care financial planning. Legacy issues like donating sizable sums to charity and gifting assets to family members are considered. Our goal-setting assessment wraps up with softer meaningful questions around what stresses you out about money and what challenges get in the way of achieving financial and life goals. The final exercise involves painting a picture of your dream retirement and how you wish to fill your days along with how that makes you feel.

Take time out from the busyness of your typical week.

You can begin your own life planning by answering the three Kinder Questions and taking our goal-setting assessment.

What’s important, though, is partnering with an experienced advisor who can help you connect your life goals to your financial goals, then construct a meaningful financial plan aligned with your true values and aspirations.