Linking Financial Planning and Life Planning

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In their book Life Matters, authors Roger and Rebecca Merrill write, “Both what and how we spend dramatically impacts the quality of our lives, the quality of our relationships, and the legacy we leave to our children—not only in terms of dollars and cents, but also in terms of character, financial intelligence and the ability to interact in positive ways around money matters.” In the same vein, many advisers report that their clients express greater life satisfaction when they see a direct link between their financial planning activities and their life goals. In addition, they observe that their clients are more motivated to make improvements in their money matters when they view their financial resources as a means to express and support their values and priorities.

To help your clients make this critical link between financial planning and life planning, encourage them to think about their lives in a holistic way. For example, ask them to view each area of their lives as an important component of their total “life portfolio.” The Wheel of Life is a common coaching tool that will do wonders in facilitating this important conversation. Simply draw a circle with about eight spokes that connect at the center or hub of the wheel. Then label the spokes with areas of life such as family, work, health, finances, community and so on. Next, using a scale of zero to ten, ask your clients to place a dot on each spoke that represents their own level of satisfaction in each area and then to connect the dots. The result is a graphical representation of their quality of life from their own unique perspective.

Next, ask your clients to identify the “riches” they currently enjoy and to think about what it would take to increase their level of satisfaction in each area of life. Also ask them to think of ways they can enrich their own lives and the lives of others. As your clients clarify what is most important to them in each area of life, they can begin to formulate life goals that are meaningful to them at a very deep and personal level. 

The next step is to help your clients think about the role that money can play in helping them to achieve each life goal. It is at this point that you will be making the critical connection between their financial activities and their personal life goals. As the Merrills remind us in Life Matters, time and money are important resources and both are languages of value: “They are highly interrelated, and the way we spend both communicates what’s important in our lives.” By helping your clients to clarify their values and establish their priorities, they will be able to make both the big and little decisions in their lives with greater clarity and purpose—a benefit of working with you that will be priceless!

Carol Anderson
Money Quotient
Poulsbo, Wash.

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