Health & Fitness
The Whats, How Much and Whys
Financial goal-setting works best when we attach goals to good motives.
By Colleen's Contributor, Lynn Torre
Most people seek out a financial advisor or planner for help with their investments or insurance needs. While these are very important, they are not at the heart of what financial planning is about. It is all about the Whats, How Much and Whys.
“What do you plan on using this money for?” I ask. Usually the answer is “Retirement, but how much money do I need to be able to retire?” The calculated, analytical answer might be “In order for you to retire at age 66 and maintain your current lifestyle, you will need $2,000,000 in savings.”
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How motivating is the amount $2 million to you? I would argue that it is NOT! In fact, it would probably make you anxious, worried, feel depressed or laugh. Women are emotional beings. The Whats and How Much typically do not move us to act but the Whys are:
- the reason we do things
- what touch our hearts and soul
- what brings us joy and happiness
Let me give you some examples:
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WHAT
HOW MUCH
WHY
Retirement $2,000,000 No longer have to work Relax, enjoy life and travel Spend time with family College $250,000 So kids can get a good education and job No college debt for them So they can have a successful life Life Insurance $1,000,000 Provide for my family if I die early Pay for my burial so the kids don’t have to Leave and inheritance for my grandkids New car $35,000 Feel safe when I drive Low cost maintenance and good mileage Enough room for the kids, equipment, etc.Goal setting is very important because it gives us a target to aim at. But it is the Whys that keep our eye on the target and our actions moving in the direction of the bull’s eye.
The next time you put money aside for a specific What, think of the Whys. You just may decide to add more money!
So when you write down your goals for 2012, next to the Whats–list your Whys. It is the Whys that make the Whats more meaningful and motivating. Don’t get your knickers in a knot worrying about the How Much.
Focus on the WHYS!
(Lynn Torre CFP® holds a BS in Consumer Education from the University of Maryland and has been in the financial services industry since 1997. With a focus on helping women, she started Financial Transitions Ltd. in 2006. A Certified Financial Planner™ Professional, Lynn (helps her clients look at the big picture of their finances including their relationship with money. Securities offered through American Portfolios Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Regal Investment Advisors LLC, an SEC Registered Investment Advisor. Regal Financial Group is independent of American Portfolios Financial Services Inc. and American Portfolios Advisors Inc. Financial Transitions Ltd. is independent of Regal Financial Group, American Portfolios Financial Services and American Portfolios Advisors.)