Financial life planning: Beyond a basic plan

This article was co-written by Cole Gustke, CFP®

Not surprisingly, the COVID-19 pandemic has had a profound impact on Americans.

A survey done by Pew Research Center found that 89% of Americans reported negative changes in their lives after the pandemic began, 73% reported some unexpected upsides (such as being able to spend more time with family) and 67% reported both negative and positive changes.1

Because of such monumental change, many Americans have begun to reassess their long-term goals and priorities. They’re understanding what’s possible for them and realizing they want to make more permanent changes in their lives.

And that’s where financial life planning can be a valuable tool for many.

What is financial life planning?

Financial life planning is the process of helping you understand what’s truly important to you in your life and how you can effectively make changes to achieve your goals. It complements traditional financial planning by placing a greater focus on defining your values and what actions you can take to better align with those values.

Many people are realizing that financial planning has helped them continue to build greater wealth, but they aren’t necessarily using their wealth “intentionally” — on things that matter most to them.

This is where financial life planning comes in. Our process helps you identify and focus on what’s truly most important to you in your life, and it seamlessly incorporates these values into your financial plan and advisor discussions. Through the process of financial life planning, we ask you questions designed to provoke deep and thoughtful responses, to truly understand what’s at your heart’s core. It’s only then your financial plan truly comes to life.

Ultimately, financial life planning is holistic financial planning for all aspects of your life.

Real financial planningSource: Carl Richards / The Sketch Guy

For example, if one of your identified values is to focus more on positively impacting your community through volunteering or charitable giving, you might decide to create a roadmap of goals related to that. The life planning exercise can help you not only realize this goal but also develop actionable, bite-sized steps to take in pursuit of it. In the next three months, you could identify a specific cause or organization. In the next six months, you could investigate specific ways to comfortably engage with the organization using your skillset, or money. Over 1-2 years, you could make a specific impact. You might even repeat this process in the future, and your advisor might help with certain financial aspects.

The impact of financial life planning

Financial life planning helps you not only manage your money to achieve your goals but also gain greater peace of mind. The end result is aligning your wealth with your values to reach a place where you feel more fulfilled by the positive changes you’ve made.

The impact of financial planning

Let’s look at a couple examples of the impact life planning has had on financial planning clients:

1. Realigning goals to values

A business owner and his wife had accumulated a lot of wealth over his career, but even though they had great financial flexibility, they had always planned retire in their 60s.

Once they went through the thought-provoking exercises of the life planning process, they realized that their initial financial plan did not truly align with their deeper values. They clearly identified that their values were relationship-centered, and they made a firm commitment to devote significant time to building and strengthening relationships with certain family members by developing a measurable action plan.

They realized this meant selling the business and retiring in the next couple years while their grandchildren were still under 10 years old, not in 5-10 years as originally planned. This would ultimately provide them with peace of mind and fulfillment from personal connectedness, which they desired more than the additional financial benefit they might get from working longer. Due to the financial scenario planning we did with them, we determined together that they were in a strong financial position to do just that.

After defining their values, the couple was able to create a Wealth Purpose Statement that acted as a guide for them moving forward and contributed to conversations with their family about their wealth and how they intend to use it. Since the life planning exercise a few years ago, the couple has sold and transitioned the business to a new owner and started a donor-advised fund in the name of their family.

2. Living a more enjoyable life

A physician and her husband seemed content to continue maximizing the wealth they had built over the decades. But did they want to spend the rest of their life building wealth, or did they want to shift their focus to using their wealth on what mattered most to them?

After going through the life planning process, they realized their family was most important to them and that they wanted to begin sharing their wealth with their family now when their kids could use it more, and this way they would be able to experience in the joy of that wealth now. Through the guided conversation, the couple was able to have deep and open conversations on topics they had never discussed with each other, to learn new things about one another and their values and to create an effective Wealth Purpose Statement to help guide them forward. In the end, they described life planning as impactful beyond what they had expected.

Don’t count out the accountability factor

Financial life planning helps you realign your life goals and actions to your values, but it has an added benefit of strengthening your financial advisory relationship. By getting to know you, your values and your goals on an even deeper level, your financial advisor can provide more insightful recommendations — and bring assistance in the form of being a great accountability coach. After all, it can be much easier to accomplish your goals when you have someone who can help you put them on paper, focus on them and stay on track.

When you should begin financial life planning?

There’s no set time to start financial life planning. It can be valuable prior to, during or after a big change in your life, such as getting married or divorced, becoming empty nesters or nearing retirement. But no matter how young or old you may be, it’s never too early to start planning how you’ll achieve the goals that matter most to you.

Wipfli Financial can be your financial life planner in this journey. Contact us to learn more.

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Financial life planning

Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at www.adviserinfo.sec.gov. Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Nate Wenner

CPA, PFS, CFP®, CIMA® | Principal, Senior Financial Advisor

Nate Wenner, CPA, PFS, CFP®, CIMA®, is a Principal and Senior Financial Advisor with Wipfli Financial Advisors in Minneapolis, MN. Nate specializes in financial planning for high-net-worth individuals and small businesses, focusing on retirement distribution planning, estate planning and business succession planning.

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Financial life planning: Beyond a basic plan

time to read: 5 min