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Ruth encouraging her kids to get the running bug at the Kendal Colour Run
Caption: Ruth encouraging her kids to get the running bug at the Kendal Colour Run

You may have noticed that we talk less about Financial Advice and more about Planning, but what does this mean? Well, rather than talking about a financial product you might need, we go back right to the beginning.

We start with finding out what is important to you in life. You will have things you want to achieve in the short, medium and long term for instance. You might not have even thought about this before let alone discussed it with your partner. A financial planner will almost “coach” you into understanding what these objectives are.

Without knowing what you want from your money, how can we make a plan? Often people accumulate and save with no real focus, or conversely spend with no thought to the future and find themselves in debt. Both sets of behaviour can be a source of anxiety. For the savers, how much is enough? For the spenders, how can you spend without the inevitable guilt and worry about the future!? A plan can help in both of these situations. Saving is more pleasurable when you have a goal, and the future is more reassuring when you start making provision.

Goal setting can be hard. We all have dreams, but we set them to one side as an impossible folly and the stuff of childhood. Okay so I might not be able to climb Everest, but what about base camp? Being a pop star might be a pipedream but what about some singing lessons? Think about your dreams and don’t set limitations; think about how the dream inspires you and find a way to make that part happen.

Here are my goals and aspirations, they are bound to change as I go along, but it feels good to have some landmarks on my journey!

  • Short-term: home improvements to kitchen, take family to Florida, run a marathon
  • Medium-term: help children with cars/university fees/house deposit/weddings
  • Long-term: retire at age 60 and travel regularly, set up a scaled back business, or work as non-executive director

Okay, so some goals might be mundane, but I love to cook and being in my kitchen is a great source of pleasure which is why I plan to improve it in the short-term. I’ve got five years until I turn 50, so I’d like to take my casual running hobby to the next level, so a Marathon is on my to-do list.

If you are struggling to think of your goals, these questions can help. These are used by prominent life planner George Kinder, who asks his clients to consider not just their goals in life, but their values.

  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? Let yourself go. Don’t hold back on your dreams. Describe a life that is complete and richly yours.
  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? (Note that this question does not assume unlimited funds.)
  3. Finally, imagine that your doctor shocks you with the news that you only have 24 hours to live. Notice what 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?

These are not easy questions, delving this deeply can be unsettling and even upsetting for some, but it is the foundation of a really good financial plan. As the saying by Antoine De Saint-Exupery goes, "A goal without a plan is just a wish" - and don't we all want to turn our wishes into reality!?!

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