By FPA member John P. Napolitano CFP™
Last Updated: January 21, 2013
As the famous philosopher and hall of fame catcher Yogi Berra once said, “If you don’t know where you are going, you might wind up someplace else.” Unfortunately, this is exactly how most people run their family finances. The focus of your financial plan today is on goal setting and developing such a compelling vision for your future that you can’t wait to get out of bed in the morning and work towards that vision.
A good starting point for goal setting is to think about how you’d like to spend your time. I mean the details of each day, week, month and year. Don’t assume that you must go punch the clock each day, and daydream about what would have you really fired up. Now, developing the vision doesn’t mean that you’ll be there starting next Monday, but it should pique your curiosity enough to wonder what may have to happen for this to become your reality. That’s where the financial counsel and forecasting may shed some light on the time frame and reality of your short-term day-to-day activities.
Think of your ideal use of time in terms of the categories, or values that are most important to you. These may include family, community, professional, spiritual, and/or personal such as fitness or hobbies or whatever other category is meaningful to you. Now rate your satisfaction with how you are currently enjoying your time spent in each of these areas, and ask how you may improve your satisfaction with your time devoted to each place. Here you’ll dig out those really fun things that you used to do, but somehow have been lost in your busy life. Make this the year that these meaningful and invigorating activities make it to your calendar.
The next part of goal setting involves planning for the consequences or costs of living out your meaningful purpose. And the first consequence is frequently discovering and trying to eliminate any obstacles that are preventing you from living the dream today. Some may be painfully obvious, such as you simply can’t afford to move to Maui and surf every day. But you can certainly calculate what it may take to afford that lifestyle, and design a plan to know by when you’ll be able to do that. Perhaps there is some middle ground that finds you in a wet suit in the northeast or taking annual trips to Maui.
Also ask what you’d like to happen if something goes very wrong. Whether you become unemployed, get very ill or pre-maturely pass away; what would you like to happen to your lifestyle and loved ones? Not the most fun part of goal setting, but perhaps the most meaningful in the event that something does hit he fan.
The one thing that you can guarantee in this process is that things will change. What is important to you now may or may not matter in a few years. This part of planning is just as important as the dollars and cents and should be the centerpiece of all future planning discussions.
John P. Napolitano CFP™, CPA, PFS is CEO of U. S. Wealth Management in Braintree, MA and the 2013 Chairman of FPA MA. Visit JohnPNapolitano on Facebook.