Better life planning means better money planning, says Dante Peters
Many of us start the New Year with all sorts of different New Year resolutions – often these are around health, wealth and general well-being. For most of us the changes we make will be short term. The main reason for this is that we go back to doing what we have always done, and as a consequence we get what we have always got.
My own New Year resolutions have often been temporary because they are not linked to what is most important to me in my life, but linked to something that I feel I ‘ought’ to do. And ‘ought to do’ always feels like a chore.
Getting a clear understanding on what’s most important in your life by asking yourself a few questions and linking the answers to any resolution you might make can make a world of difference. There are many approaches that will provide clarity on what is most important to an individual. As a financial planner I like the EVOKE™ approach offered by the Kinder Institute.
The EVOKE™ process is a 5 stage process consisting of:
E – Exploration V – Vision O – Obstacles K – Knowledge E – Execution
The Exploration and Vision Stages provide clarity on what is most important to you, and the three questions shown below are part of the process. Take some time and ask yourself each of these questions in turn:
Question 1 Imagine you are financially secure, that you have enough money to take care of your needs, now and in the future. The question is… 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, that is richly yours.
Question 2 This time you visit your doctor who tells you that you have only 5 – 10 years left to live. The good part is that you won’t ever feel sick. The bad news is that you will have no notice of the moment of your death. What will you do in the time you have remaining to live? Will you change your life and how will you do it?
Question 3 This time your doctor shocks you with the news that you have only one day left to live. Notice what feelings arise as you confront your very real mortality. Ask yourself:
What did I miss?
Who did I not get to be?
What did I not get to do?
Once you have answered these questions you should start to have a good idea of what is most important to you. At this stage you might start to find you are struggling to see how you can achieve your goals – this is the Obstacles part of EVOKE™. If you are finding overcoming obstacles difficult you might like to try this approach.
Stage 1 Ask yourself what have been the three best things about the day or week so far.
Stage 2 Re the obstacle you are facing ask yourself these questions:
What is currently going right?
What could be ideally right?
What is missing?
What one thing could I do now to make it right?
Stage 3 Ask yourself “If I did that one thing that makes it right what might the outcome be?”
Stage 4 Write a list of action points.
Maybe include a date by when each action point will completed, and whom you might need to speak to and gain advice from in order to complete each point. Hopefully all of the above will allow you to identify what is most important to you and also provide you with a plan of action. This should allow you to complete parts K and E of EVOKE™ – Knowledge and Execution.
You may ask be asking why a financial planning firm would be writing about life planning – people are about so much more than money. However money is the thread that runs through all our lives and uncertainty around money is one of the major reasons why people deny themselves their dreams.
As a firm we offer a financial coaching service that follows the EVOKE™ process but we also use lifetime financial forecasting software to model your financial future. The combination of these two approaches will provide you with a plan and a track to run on. With a plan you are more likely to make your goals and dreams a reality. Could you do with a plan?
Dante Peters B.Sc. RLIP is a director of Magus Financial Management Limited and is a registered Financial Life Planner through the Kinder Institute.