In the New Year, Black Enterprise Money is going to help you examine and create a plan for every aspect of your financial life: retirement, education costs, debt elimination, savings; you name it. As we begin this journey, we must first do a little soul searching, so that we get a vision of who you want to be and what you’re planning for.
We don’t want to fall into the trap of getting so focused on the numbers that we forget to navigate the complexities of our relationships with money and blindly allocate resources towards things and situations that don’t bring us closer to our vision.
“If you are in earnest pursuit of your goals, you feel a tremendous sense of well-being that extends to your finances,” says George Kinder, founder of the Kinder Institute of Life Planning, and author of Life Planning for You.
“It’s most important to set personal goals and [ensure] those personal goals have financial requirements. Our personal goals are supported by our financial goals,” he adds.
Kinder, a world-renowned financial planner, and considered the father of the life planning, holistic approach to money, has his clients begin by imagining themselves in the following three scenarios, in his efforts to see what’s really important to them and where they may be putting time and financial resources that are not true priorities.
1. Imagine that you have all the money you will ever need. Money will never be a concern. If money is not a problem, what will you do with your life? What will you do with your time?
2. You go to the doctor and you find out you have five to 10 years left to live. Knowing that death is coming sooner than you expect, how will you change your life?
3. In the third and final scenario, you find out you are going to pass away tomorrow. Don’t think about what you will do on your last day on Earth, but think about your regrets? What do you wish you had done in this precious life that’s about to end?
“Give yourself the right to have, do or be anything that comes to mind. This exercise has nothing to do with realism,” says Kinder. “These questions reveal parts of our lives that need to be resolved, not swept under the rug. Let the emotional importance of these scenarios sink in,” he adds.
You can also go through the life planning process and create a plan for free at Kinder’s website, www.LifePlanningForYou.com
Getting clear on what your ideal life looks like is the foundation for a life and financial plan that you can stick to. It is also very helpful to tell a friend what you are trying to do, and ask them to help you stay on course. Psychologists say that social support is critical to the behavior change process.
In addition, set a date and time to go through the questions as we lay the foundation for you to create a financial life that reflects your goals and values.