Create a Financial Life Plan with a Few Simple Questions

July 22, 2013

Prior to becoming a full time financial educator, some of the work that I did with my clients fell into the realm of what is often called financial life planning. Financial life planning gives money more meaning and purpose and helped my clients do more than just focus on typical financial goals such as deciding when to retire, where they plan on living, and how much the expected lifestyle will cost. Rather than simply focus on money and wealth, it helps people decide what is really important in their lives.

In order to use the life planning process to discover the deeper values in their lives, I posed three important questions during the discovery stages.  If you are struggling to follow your financial plan or just need some help prioritizing your goals, take some time to consider these important questions:

1. Imagine you are financially secure, that you have enough money to take care of your needs, now and in the future. How would you live your life? Would you change anything? Now is the time to let yourself go and try to not hold back on your dreams. The goal here is to describe a life that is completely yours and not hindered by financial obstacles.

2. Now imagine that you visit your doctor, who tells you that you have only 5-10 years to live. You won’t ever feel sick, but you will have no notice of the moment of your death. What will you do in the time you have remaining? Will you change your life and how will you do it? (Please note that this question does not assume unlimited financial resources.)

3. Finally, imagine that your doctor shocks you with the news that you only have 24 hours to live. Notice what thoughts or feelings arise as you confront your very real mortality. Ask yourself: What did you miss? Who did you not get to be? What did you not get to do? Who did you wish you spent more time with?  Do you have any regrets?

These questions were originally posed in a financial planning context by George Kinder, a pioneer in the growing field of financial life planning. When you follow the progression of these questions, you see the difference between possibilities, priorities, and regrets. Another effective life planning question worthy of additional exploration is as follows: What message does how you spend your time and money send to the people you care about the most?

Financial life planning encourages smart financial decision making. Most of all, the holistic approach to managing wealth and money adds meaning to the entire process. Otherwise, the pursuit of “financial freedom,” whatever that term may mean to you, could end up being a fruitless endeavor.