Why should you do holistic financial planning right now? Um, maybe you shouldn’t.
I’m going to make a bold statement: I kinda dread it when people come to me for holistic financial planning when the reason they are moving forward is because they feel like they have to do it RIGHT NOW. I find that most people look for some level of holistic financial planning when a major life event is about to happen, such as:
- Getting married
- Having a baby
- Major promotion
- Paying off debt
- Kids start primary school (and you don’t have to pay for daycare anymore, woohoo!)
- Kids start college
Instead, I like to think of holistic financial planning philosophically: essentially, regardless of where you’re at in your life stage, you’re trying to make the best use of every dollar that comes in and goes out of your household.
That just means knowing that you’re saving enough, in the right places.
So for a lot of people, holistic financial planning isn’t about making a drastic change, it’s more clarity and getting on the same page with the other people in your family (or getting on the same page with yourself). It’s about gaining clarity and shifting gears (maybe a little, maybe a lot) so you don’t get too far down the road before realizing you might need to course correct.
Holistic financial planning is giving yourself permission
Most people think financial planning is about NOT doing something — not spending as much, mostly — but it’s really about permission. Permission to have a vision. So many people are so scared of their financial lives, they just ignore it and hope it works itself out.
What’s the difference between “saving for retirement” versus “right now, I am putting away as much money as possible so that I can quit my day job and go run an online business from a hammock in Bali.”?
Now, right there, all of you probably started modify that picture I just painted…Hammock? Bali? No, I’d open a handmade store on Etsy and stay right here in Seattle — or whatever.
The point is, something gets you excited, and that something most likely needs you to arrange your money to support it, right? And how do you know if you’re getting what you need from your money unless you can see your money paving the way for your specific, awesome future vision for yourself?
My hope for people is that holistic financial planning is never urgent, in the sense that you’re under a crunch to make a good decision about something.
Instead, I hope for urgency to get what you want from life. I hope for urgency around your awesome, unique vision of the future. And I know the way you get there is more consistent attention, more clarity and discussions, so when the big decisions come up, you know what to do.
How to find your vision
What if I told you that you could make one decision now that would make all your financial decisions for the next 12 months so much simpler? Would you be interested?
(Duh. Of course you would!)
I call this decision your Chief Initiative, and it is basically a values and goals statement that can guide all your decisions for the next year. Think of it as true North for your finances.
In my financial planning practice, I was meeting with a couple who seemed to be not only on different pages about their finances, but in entirely different books. The husband had very different life goals from his wife’s. He wanted to borrow money to start a business, change houses, change jobs, etc. She, on the other hand, was nervous about so much change and financial instability.
So I asked them both to identify their biggest life value — their Chief Initiative. Interestingly, for both of them, their biggest value was family. Eureka! Common ground.
Knowing their Chief Initiative helped them focus every financial decision on that value. It narrowed the focus for making decisions from a place where everything was possible to a place where it was easy to see whether a decision was in line with their values or not.
It was only one word — family — but the effect it had on their ability to come together and make tough decisions was incredibly powerful.
If you’re interested in the process I went through with them to uncover their values, you can download it for free in this workbook here.
You may already know what your Chief Initiative should be. For many people, it’s a gut feeling that they can’t deny. They already know what their strongest values are: family, charity, stability, prosperity, etc.
But for some, there won’t be a single value that comes to mind right away. Maybe you’ll have a bunch that you have trouble choosing between, or maybe you haven’t got any.
Either way, these questions can help guide you to choosing one that you want to focus on:
- What’s causing you stress in your life? It’s likely that you’re feeling stressed by something because it’s going against a core value.
- What is most important to you in your life? I’m talking about the thing that you would do or want or believe no matter what. If money were no object and no obstacle, what would you focus on?
- How do you want to feel? Danielle LaPorte is on to something when she talks about her Core Desired Feelings idea, and it can be used to describe your values as well. Maybe you want to feel free, responsible, honest, spiritual, or abundant. That feeling can guide your decisions.
If you want some additional inspiration, you can check out this extended list of values as a starting place.
Once you’ve chosen your Chief Initiative, you can validate it a bit more by asking yourself, “What does [your value] mean to you?”
The most amazing thing about this process is that there is no right or wrong answer. You value what you value — period.
Remember to download your own free copy of the Chief Initiative workbook so you can help uncover your values for yourself – download that here.