Financial Planning Is Not Budgeting

Financial planning is the allocation of resources and the focus of your attention to the way you want to live your life – today and tomorrow, with learnings taken from yesterday.  In other words – to live life ‘on purpose’ – your purpose.

Our contention is that the stronger your purpose the stronger your resolve.  The weaker your purpose the weaker your resolve.

Budgeting becomes a formality when a) you know what you really want (your goals),  b) you know how to structure your banking (control), c) you have confidence in the process (alignment of financial management with short, medium and long term goals).

Of course life has a habit of ticking by and producing unforeseen obstacles – financial, health, business, and relationships.  How effectively you handle these ‘events’ is directly attributable to your strength of purpose – your mental capacity to manage the moment.  The weaker your goals the weaker your habits and resolve.

Another ‘obstacle’ to living life on purpose is a deeply entrenched bias or belief.  An historical upbringing which has scripted how you act or react to external influence.  Somewhat like the ‘triggers’ of chemical dependency experienced by cigarette smokers and alcoholics.  So too with financial management. Debt management and investment are linked.  How these two critical financial actions are managed over 40 years of your life is not something easily done on your own, with your life partner or with a series of loose ideas or product purchases.

Financial planning is not goal setting.

That would be too conceptual for most to accept as an explanation for their current financial predicament or a pathway to their financial security.  Risk and reward being either a step too far or an overly used cliché – something other people do (and lose their shirt – the bias and belief) or something ‘I’ do every day without much thought as to its long term consequence (the food I eat, the exercise I take, the books I read, the TV I watch, the music I listen to, the friends I keep, the actions I take, the decisions I make).  Nothing wrong with celebration and reward – but does it truly take you towards where you want to be or what you want to happen on the journey (your life).

Finally, certainty isn’t something guaranteed but financial planning should attempt to deliver it.  Someone who is prepared to commit to certainty based advice (giving and receiving) is someone worth spending time with.  They and you must have a long term outcome in mind.  Things such as: financial control, confidence with investment and peace of mind from estate preservation and asset protection. A framework designed around a sense of purpose, financial security, friends, family and good health. The things that make us happy.

The measurement and management of three critical strategies (bank, investment, insurance) in financial planning is the mechanical function of a ‘planner’ – the alignment of personal and or business goals is the ‘art’.  People change, so too circumstance – unless plans are reviewed regularly they become usurped by life and interrupted by other people.  The ongoing habit of measure and review is as important as the initial euphoria from a brilliantly designed lifestage plan which has clearly articulated your roadmap – from whatever age and whatever stage.

Living your life on purpose is a tremendous outcome derived from planning for financial security – it’s also a rewarding profession for those few of us who have the qualifications, desire and capability to deliver it.

The information provided in this blog is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.