What is Financial Life Planning?

By Andy Baxley, CFP ®, CIMA ®

What is Financial Life Planning?

I’ll never forget the day I passed the exam to become a Certified Financial Planner professional. The relief I felt that day was truly indescribable. The stress, late nights, and seemingly endless sea of flashcards had finally paid off. I was ready to be a financial planner.

Or so I thought.

As it turns out, the analytical skills one learns studying for a test like the CFP® only account for a portion of what one needs to know to be a truly competent financial planner. Mastering the technical components of financial planning and learning how to communicate them effectively is certainly necessary, but it is not sufficient.

It didn’t take me long to realize something was missing. Rather than being dazzled by the rigorous and detailed analyses I had created for them, many clients met my efforts with looks of boredom and a disengagement. It was humbling to realize that the technical proficiency I’d gained studying for the CFP® ultimately wasn’t going to be enough to help my clients in the way I wanted to.

I had to find a way to make the numbers come alive for my clients. But how?

This question resulted in years of exploration that would lead to the financial life planning movement, and, eventually, to a career at The Planning Center.

What is financial life planning?

At the heart of the financial life planning movement lies the assumption that financial wealth is a means, not an end.The accumulation of financial assets means nothing until we’ve answered a fundamental question- what is it all for?

Financial life planning is the process of exploring that question.

To apply a more formal definition, it is the process of aligning our resources with our unique vision for a rich and meaningful life.

What is it like to go through the financial life planning process?

New clients often tell us that the financial life planning process feels different from what they were expecting or have experienced in the past.

One reason for this is that we begin with a focus on thoughtful inquiry and deep listening. We don’t dive into the numbers or offer guidance until we’ve devoted ample time to exploring and identifying what is truly important to each client.

At The Planning Center, we use a set of tools created by financial life planning pioneers Carol Anderson and Amy Mullen to guide many of these initial conversations.

Carol and Amy’s True Wealth™ Process, which they’ve carefully crafted over many years, provides an evidence-based structure for exploring several important questions, including:

  • How was money approached by your family when you were growing up? What beliefs and behaviors do you carry with you today that can be traced back to your early years?
  • Which of your beliefs and assumptions about money have served you well? Are there any that have become counter-productive?
  • What is the most important benefit that money gives you today?
  • What would you do differently if you “had the money”?
  • In which areas of your life (and your financial life) are you truly satisfied? Which could use improvement?
  • What are the key values, priorities, and goals that drive your decision making?

By exploring these questions and others like them, we work with our clients to uncover a clear and compelling vision of their ideal future.

When it comes time to finally offer financial recommendations, the suggestions we give all have a clear “why” behind them. Rather than dolling out cookie-cutter advice, we help our clients put money to its highest and best use, whatever that means to them. If you’d like something different, contact TPC to learn more about financial life planning for you.