A Process, Not a Destination

A Process, Not A Destination
Words by:  Bryon Gragg
Published March/April 2010

As the newness of 2010 slips away, I am reminded of a line by John Lennon: “Life is what happens while we are making other plans.” A new year, new decade and bright future inspire many resolutions and if you haven’t already done so, make 2010 the year to get your financial house in order. Financial planning may seem like a daunting task but it really parallels the structure of a fitness program.

The first step is an honest assessment of where you stand. Do you have an updated will? Do you have a power of attorney? What are your assets and where are they located? What debts do you have and to whom? Are you properly protected and insured from unexpected events? This is the financial equivalent of seeing your physician before starting a fitness program. You have to know where you are before you can get to where you are going.

The next step is to determine your goals and values. What is important about money to you? It is critical that you think about what is really important to you. If you don’t have the desire or your goals don’t really tie to your values, you are unlikely to pursue them for the long term. Everyone’s goals will be different; dreams and visions are as unique as the individual. Common long term goals are to be able to retire comfortably, to help children or grandchildren receive a college education, to travel, to start a second career or do mission work. Shorter term goals such as a new car, family vacation or home renovations should also be included. Once you have identified where you want to be and where you currently are, the planning part is a matter of plotting the course from one point to another.

Just as you may hire a personal trainer or fitness coach, you may need a planner to help assist you in developing and monitoring the plan. Make sure you find someone who can assist you along the way and will work with you in putting all the pieces together. When people think of financial planning, they often think of investments or insurance. Those may be pieces of the financial plan, but by no means are they themselves a financial plan. Just as proper nutrition, exercise and rest are all parts of a fitness program, without the proper balance you can’t achieve your fitness goal efficiently, if at all. Estate planning, debt management and income taxes all come into play with a financial plan. If you only focus on one or two of the pieces, you will hold yourself back.

Financial planning is a process, not a destination. Life rarely works out exactly the way you plan. At the beginning of the last decade I thought I would never change another diaper, yet ten short years later here I am looking at another college education to fund and a seemingly endless need of diapers. The things that were important then aren’t as important now and thus my plan has changed. The plan isn’t written in stone. It’s not something that is done once and put on a shelf – it is adjusted as life dictates.

Just like thinking about exercise won’t make you fit; a financial plan without action won’t get you where you want to go. 2010 should be the year you make a plan for life before life happens while you’re making other plans.