Our aim is simple – we want our clients to understand that being good with money is not about day-trading or knowing the latest crypto-lingo. In our work with clients, we have found that financial satisfaction – feeling really good about how you manage money – is achieved by aligning your financial decisions with your personal goals and values.
Our commitment to goals-based financial planning is not about checking a box or defining financial success by the dollar value of your financial resources. Rather, it’s about how you use your financial resources to achieve what you care about most. It’s a methodical and engaging (and fun!) process of uncovering what brings you joy and satisfaction, and then using that knowledge as the basis for your financial decision-making.. Once clarity is reached on these things, it will be easier for us to crunch numbers and develop a successful plan that allows for more joyful life experiences.
The first challenge in identifying goals is to set aside any preconceived ideas about what financial success looks like. Billboards and podcasts alike tell us we should buy a house and a car and save for education and retirement. Yes, these goals may seem reasonable, but generally, they don’t resonate or motivate.
We have seen that a better approach is to identify significant and meaningful goals that can be intrinsically inspiring. These goals should be based on your values such as safety, community, independence, creativity, and connection, to name a few. Here are some examples of goals that clients have shared with us that reflect their values:
I’d like to:
…cut back on my work hours so I can finally take that ceramics class.
…find a plot of land where I can design and build my own cozy living space.
…have some money set aside that I can spend without having to ask permission.
…live in a community that feels safe and supportive.
…host family gatherings and holidays.
…pursue work that feels meaningful.
Do any of these goals resonate with you?
Defining your goals takes time and reflection, and it helps to have a structured process and someone to listen and ask questions. Our process, which uses research-based tools developed by Money Quotient, begins by exploring what is currently working for you. When are you happiest? When do you feel a sense of purpose? What aspects of your life are most satisfying? From there, we can explore areas of your life that are less satisfying and identify changes you’d like to make.
Once these questions are answered, we often find that some of them are interdependent. For example, one change may need to happen before another. Oftentimes, some smaller actions will make the bigger actions easier to achieve. That’s why a big part of our goals-based planning process involves prioritizing and identifying the steps along the way that will make the path easier to navigate.
Once the direction is determined, we can turn to the numbers and begin to map out a financially sustainable path that supports your goals. We do this by gathering your financial information, including assets, liabilities, earning capacity, spending needs, etc., so that we can begin to model a variety of scenarios. This allows us to discuss trade-offs and make deeper decisions about what’s most important to you.
For example, if your goal is to cut back on work hours to take classes, that may mean a reduction in earnings – can this be done sustainably, or do adjustments need to be made? Or, if we know that you have decided to purchase some land to build that cozy getaway, we work to think through the potential costs, whether financing makes sense, or whether other assets need to be liquidated to make the purchase. These decisions are always based on the context of your values and what other goals you are hoping to achieve.
It’s important to remember that although your goals set the direction, the destination is not fixed. As you experience challenges and transitions, goals change – sometimes by small degrees, and sometimes significantly. This is why at The Humphrey’s Group we understand that exploration is not a single event. Our life-long relationships with our clients allow for continual discovery through all stages of life.