Do life planning before financial planning!

“In preparing for a battle I have always found that plans are useless, but planning is indispensable,” 

said former American president, Dwight Eisenhower.

Planning is essential for everything as it is when we plan that we are able to come to different possibilities, some good and some bad for the project at hand. This holds true when we are planning our finances as well. However, since life is dynamic, a plan created with all known information at one point, may not be true after some time. Life situations change and so can goals, expenses, income etc. Hence, the plan would need to be reviewed and recast – something that is part of the planning process itself.

Now, financial planning is not all about planning your monetary goals, there is another relatively lesser known concept called life planning. Life planning helps in planning for those goals that can bring meaning and happiness to our lives, instead of focusing on achieving just the monetary goals.

All of us have goals - like buying a home, a second home, foreign holidays, cars etc. We focus on these and plan and save to achieve them over a period of time. But, the important point is, do these goals bring true satisfaction and a sense of achievement to a person? Unfortunately, in most cases the answer is no.  

It is not to say that these goals are not important. While we do need the money and the conveniences it brings, we should not become its slave

When we pursue goals that don’t really matter and spend time and energy achieving it, we feel tired, burnt out, exhausted. And once we achieve it, there is no satisfaction or delight in having achieved something since these were meaningless goals in the first place, which were probably taking them away from the real goals that would give one a sense of achievement.

How does life planning make a difference?   

There is no set formula on how you have to live your life. The life we have is the only life there is and we have the option to make it meaningful. But, for that, we need to understand what is meaningful to us and what is it that we really want from life.

Life planning precisely addresses this. This is a new area where the focus is to find out what is truly important for us in life, what will deliver that freedom from the bondage of a humdrum existence. Do you want to get involved in more charitable work, do you want to change your career to something that is closer to your heart? Life planning helps you achieve such goals.  

To facilitate this, there are exercises to go through which will assist the client to focus on a meaningful life they have always wanted to live. There are some fundamental questions which one needs to ask, which will help them narrow down on what they really want to do in life. Once they discover their true, heartfelt goals, and see the vision of that wholesome life they can create for themselves, they get hugely excited. The life planner acts as a guide and mentor and paints that ideal life for the clients to see. This helps the client realise what a fulfilling life they can actually live and they get to experience the entire repertoire of emotions that would arise out of such a life.  

This may call for rework of one’s life as it exists today. Some of the goals which one had in the past may not retain their appeal any more. New goals would take its place, there could be adjustments in income, expenses etc. too, depending on what one may want to do going forward. One may feel an anticipatory thrill as well as a trepidation which comes from a leap into the unknown. Obstacles may present itself, which the client would resolve drawing strength and support from the life planner. The next step would be to consider all these goals and create a financial plan and implement it so that the life ahead is smooth.

Here is how life planning can work:  Let’s take the example of Rajiv. He was doing extremely well in his career, however, there was something missing. In his session with the life planner, it came out that his heart's core goal was to travel extensively, which he was unable to do in his current avatar. Rajiv was interested in combining his current skills with his passion and wanted to build start a travel business. During the discussions, Rajiv himself came with the idea of building specific communities of travel buffs and serving their needs. He is now completely fired up with enthusiasm of the amazing possibilities of this new business, which is close to his heart. The planner has now created a plan with these goals in mind and is helping Rajiv live a life filled with meaning and fulfillment.

In a nutshell

The initial portion of life planning is important as this is where the client and the planner jointly explore what is that which may make the client’s life truly lived. Once the client understands what would make their life meaningful, they get veritably excited. The new life envisaged may have problems that need to be surmounted and the planner plays a huge role here in ensuring that the client does not get disillusioned and slide back into their erstwhile existence. The life planner holds and keeps the torch of their dreams burning till the client is able to reconcile with the adjustments needed and gets the fortitude to make it happen. Then a financial plan which accommodates the new life is drawn and the recommendations implemented. From time to time, the life planner is in touch with the client to find out if they are on track and offer any guidance that may be required.

We all deserve a life where we experience the freedom in our lives to achieve our true potential and live a life that is truly meaningful. And life planning can make this possible.

When life planning is made a part of financial planning, it becomes a force multiplier for the client. As George Kinder, the father of the life planning movement says, “Life planning is financial planning done right”.


Article first published on ET Wealth:

You should do life planning before financial planning. 

Author  -   Suresh Sadgopan  | Founder | www.ladder7.co.in

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