How Your Financial Values Need to Tie Into Your Life

The financial planning industry has evolved since I began in it 20+ years ago.  Initially, we referred to “goals-based” planning to help clients to articulate what they want their money to do for them.  Instead of “retiring comfortably” we helped clients to describe “retiring with an annual lifestyle costing $50,000 per year in today’s dollars”.  While this was impactful, the problem with goals-based planning is that if living on $50,000 per year is good, then $60,000 per year must be better.  In other words, our goals can creep and become loftier and loftier.  In contrast, “values-based” planning encourages clients to delve into the values that clients want to live by.  Furthermore, when you are living according to your values, life feels satisfying.  Values can include generosity, security, education, volunteerism etc. which can then spur a discussion of how to assemble the capital required to support these values.

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