Build a Financial Plan Around Your Life Goals
In this article, Don James, CPA, of DJ Tax Solutions explains how a clear personal vision drives effective goal setting, and shares fifteen questions to help you take inventory of your life and clarify what matters most.
Why Vision-Driven Goal Setting Matters
Every year I work through my personal strategic plan, and the questions below have helped me clarify my thinking more than almost anything else I’ve used. My planning involves setting personal goals for the year – goals that are birthed from my vision for my life and that tie directly into my financial plan. These questions help clarify that vision.
A lot has been written about setting goals. (Yes, it is that important.) Henry David Thoreau said, “If a man advances confidently in the direction of his dreams, and endeavors to live the life he has imagined, he will meet with a success unexpected in common hours.” This implies that you must have a dream. You must endeavor to live the life you have imagined. When the dream is linked to purpose and values, there is an overwhelming incentive to pursue it.
What Does Goal Setting Have to Do With Financial Planning?
The answer is simple: everything.
Purpose-driven living provides meaning and direction in how we order our financial life. It helps guide decisions involving:
- Saving and investing
- Business growth
- Retirement planning
- Tax planning
- Estate planning
- Charitable giving
- Major life decisions
When you have a clear understanding of your purpose and values, decisions about money become noticeably easier.
Does Writing Down Your Goals Really Make a Difference?
There have been several studies illustrating the benefits of goal setting. The best-known is a study done at Yale University in the 1950s. Researchers asked the Class of 1953 a number of questions, three of which had to do with goals: Have you set goals? Have you written them down? Do you have a plan to accomplish them?
Only 3 percent of the class had written down their goals with a plan to achieve them. Thirteen percent had goals but had not written them down. Fully 84 percent had no specific goals at all, other than to “enjoy themselves.”
When researchers resurveyed the same class in 1973, the differences were stunning. The 13 percent who had goals but not in writing were earning, on average, twice as much as the 84 percent with no goals. And the 3 percent who had written their goals down were earning, on average, ten times as much as the other 97 percent combined.
It’s worth noting that this study has been challenged for its methodology and the reported findings have never been independently verified. But the underlying point – that writing down goals correlates with achieving them – is well-supported by more rigorous research that followed.
Vision First, Goals Second
Goal setting is determined by your personal vision. A personal vision is the deepest expression of what we want in life. It is a description of our preferred future, not a prediction of what will be. Your personal vision should describe what you want out of life and work and what kind of person you want to be. Instead of forecasting what you think might be likely, your personal vision is a description of the future you dream about.
Fifteen Questions to Clarify Your Personal Vision
These fifteen questions, adapted from Todd Duncan’s book The Power to Be Your Best, help take an inventory of where you are right now. I’ve found they help me become more intentional about what I need to become to sense my true significance.
- Am I missing anything in my life right now that is important to me? What’s not happening that I want to happen?
- What am I passionate about that gives meaning to life?
- Who am I, and why am I here?
- What do I value that gives real happiness?
- Where do I want to be and what do I want to be doing in 5 years? 10 years? 20 years?
- What gifts that I have been given am I using effectively? Which am I not using effectively?
- What is it that I believe so strongly in that I would be willing to die for?
- What is it about my job that makes me feel trapped?
- What realistic changes can I make in how I run my business so I can experience more freedom?
- What steps should I be taking now to ensure that the future is as meaningful as possible?
- With regard to money, how much is enough? If I have more, what will the excess be used for?
- Am I living a balanced life? Which areas are in need of time and focus?
- Where do I seek inspiration, mentors, and working models for greater significance?
- What do I want to be remembered for?
- What legacy do I want to leave for my children?
Consider your responses as you reflect about your personal vision. They may help you identify the most important elements of that vision.
Turn Your Vision Into a Financial Strategy
A vision without action remains only an idea.The next step is building a financial strategy that supports the future you’ve imagined. Whether your goals include growing your business, preparing for retirement, building generational wealth, or creating a lasting legacy, your financial plan should provide a roadmap for getting there.
When your goals, values, and finances are aligned, every financial decision becomes more intentional.
Build a Financial Plan That Supports Your Goals
At DJ Tax Solutions, we believe financial planning is about more than managing numbers. It’s about helping you build the life you want while making wise decisions with the resources you’ve been given.
If you’re ready to create a financial plan that reflects your personal vision and long-term goals, contact DJ Tax Solutions today to schedule an introductory consultation.
