The Silver Purse/defining-goals

Goal setting is a creative process, and can be difficult for some people. You'll need to
pose some questions to yourself and wait for the answers. They may come
immediately, or they make take a few days or longer.

The process of "financial planning" is a holistic look at organizing your financial life to
reach your goals. The general process can be done with a Certified Financial Planner
(CFP) or similarly trained professional, or on your own.

I like to see people go a little deeper when financial planning, by identifying their
most cherished goals or dreams. Identifying these heart-felt wishes can be a strong
motivator and keep us on the path to success when some current sacrifices are
necessary.

George Kinder CFP developed a unique "life planning" set of lessons in his book
Lighting the Torch (FPA Press). Life planning is a specialized part of financial planning.
You can get a sample of how it feels by answering 3 questions Mr. Kinder poses to his
clients near the beginning. (Read his book or find a planner who has taken his training if
you want to experience the full process.)

The 3 questions that follow help define cherished values and dreams. Find your passion
and you'll be more willing to save for your dreams. Give yourself some quiet, protected
time to reflect on these questions.

Question 1: If you were already financially secure, how would you live your life? Would
you live differently than you are now? Imagine the details of a life that included all you
really want to do and be.

Question 2: Your doctor informs you that you have 5-10 years left to live with more or
less current functioning. What would you do with the time you have left? Are there things
you still want to achieve? How would your life change?

Question 3: If you were told you have only one day left to live (ouch), what regrets would
you have about unfulfilled dreams or goals?

These are piercing and emotional questions that get to the heart of what you value and
cherish and what you want out of life. How does all this relate to money and finances?

Many people feel that lack of money holds them back from achieving all their
goals. There are many things we'd like to do that require some financial resources:
college education, home ownership, travel, leisure time/retirement, financial support for
family or favorite charities, etc. Money is a tool to help us reach many goals, so a basic
knowledge of how to grow and manage money is important.

Other goals can be reached without the need for financial support (self-education,
building friendships, participation in causes or activities we enjoy, etc.) You may find
that your goals fall into both areas--ones that need money and ones that don't.

Those goals that require financial resources are the ones requiring financial planning,
although you'll want to pay attention to the other side equally. List what goals require
your financial support, maybe in a journal or online diary.

Note what time frame the goals need. Example: buy a home near the ocean within 4
years, travel to Europe to see friends next summer, retire with a certain income. Be as
specific as you can and focus on those things most important to you. Some Life
Coaches suggest making a "wish board" of pictures or words that reflect your goals.
Keep it in a place where you'll see it regularly.

Your goals may get refined over time, with some getting dropped and others added.
That's OK and all part of the process. Most importantly, make the goals reflect what
YOU want out of life, not just what others expect from you. This is your chance to play
with ideas and dreams and weave your own unique life. Go for it.
Robin Applegarth

Related reading
Setting priorities article (external link)

Psychology of money topics

Savings goal calculator