Broker Check

Weak Point in the Financial Planning Process

| December 19, 2018
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From the very beginning of my career and as a core part of my CFP training, I was taught to follow a financial planning process. A quick internet search will lead you to a number of six-step processes that look something like the circular chart below. At first glance, and for many years in my career, I was very confident in the value of these steps—and I still am. However, I believe there is a significant weak point in the process. The weakness is in the second step: “establish goals.”

How Is This a Weak Point?

Throughout my career, as I try to help clients establish goals, I find that oftentimes people have fuzzy goals that are usually some version of what everyone else is doing. Everything in society, family, friends, and neighbors are constantly reinforcing all the things you are “supposed to want”—which usually amounts to accumulating more stuff, bigger houses, and maybe a vacation now and then. This can become a lifelong trap.

Establishing goals is a foundational step in the financial planning process. If your goals are fuzzy and aren’t what you really want, then the process won't work for you—not really. It may help you gain financial success. But is that all you want in life? What about other things that are important to you? Lifestyle, family, health, faith, philanthropy, travel, adventure…the list goes on.

A Better Way to Establish Goals

The crucial step of “establishing goals” should not be glossed over or filled in with cookie-cutter answers. Take some time to think about what you really want in life. This may require some deep thought and difficult soul searching.

Here are the basic questions you’ll need to answer: 

  • When would you like to retire?
  • What does financial independence mean to you?
  • What do you want to provide for your spouse if you make them a widow or widower?
  • What do you want to provide for your children?

Here are additional questions I’d urge you to consider:

  • How you would spend your life if you knew your date of death?
  • If you knew with certainty that you had 1, 2, or 3 years left to live?
  • How much time would you spend watching TV versus being with family and friends?
  • What would you say to the people you love?
  • If you only had time for one more vacation, where would you go?
  • Who would you spend time with?
  • What would you want to learn?
  • What would you want to read, see, experience, taste, explore?
  • Who would you help?

Why Answer These Other Questions?

Often, you can distill what you want when you are under pressure. If you take the time to do the mental exercises above and really define the things you want to do, then you can work with your budget (or a financial planner) to figure out how to do more of those things right now!

Look for things you are spending your time and/or money on unconsciously. Things that are robbing you of the ability to do whatever you would do if you knew you were going to die soon. Consciously eliminate some or all of those things from your budget and make a list of things you’d like to do instead.

This list doesn’t need to be grand or expensive. Maybe you’ve always wanted to read a certain book, visit a certain place, add a healthy practice to your daily routine, sit down with your parents to record their family stories, etc. Setting aside time do the things you really want to do can bring great levels of joy and happiness.

Whether you’ve been planning for years or you’re just getting started, taking the time and developing the courage to figure out what you really want is invaluable.

If you don’t know the answers right now, don’t let that prevent you from taking important steps today to build your financial independence and protect yourself and your family in the event of a premature death or disability. If you have questions or want to brainstorm, let me know! Contact me online or email

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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