When we first sit down with a new client family, they are sometimes surprised to find that our initial focus is not on their investments or income. While these are pieces of the puzzle, we have witnessed time and time again that the amount of money you make is not an accurate predictor of financial or life success.
We believe the foundation to good financial planning is a deep understanding of what is more important to a family than money. Money is just one resource we utilize to accomplish the things we value most. Therefore, being successful financially is more about aligning the use of your available resources to get what you both want out of life than it is about trying to get more resources.
Since you may have been a client for a while, we thought it might be good to share one of the first exercises we ask new clients to do. If your life is anything like mine, it’s easy to let the important things drift out of sight due to distractions and routine.
When people – especially couples – are asked to express their core values (the things they value more than money), they often stumble. And if they do offer a quick answer, it’s usually so general that it isn’t useful for planning – for instance, “faith and family” are obvious answers (and great things!), but they’re not specific enough to create action items.
The first thing we recommend is to go on a date and discuss the last year. Ask yourselves what about the last year you both would like to see more of and what you would like to see less of. Write these things down – be specific.
We can all think of resources we want more of – things like time, money, health, friends – this list could be endless. But since we can’t add hours to the day, we need to be honest about the other side of the ledger. What did we do with our time and other resources that didn’t make life better? Where was the waste? Think of this as the annual audit – did we get what we really wanted?
So many of our key resources are scarce. If we are going to be successful, both in life and financially, we need to align the wise use of resources with our values. This requires us to know and prioritize our core values. These are the things we want to make progress on first. Making progress on these priorities defines success.
Using the “more and less” approach to uncover our core values – or just to see how or if they have shifted over time – is a great way to get back on the same page in your relationship. If you discover something out of alignment, let us help!