We’ve all heard of (or experienced) the “annual review.” Especially common in corporate environments, this review typically goes over the following:
- What you did at work for the past year.
- How well you attained goals set for you throughout the past year.
- Feedback on your performance.
- What you hope to accomplish in the coming year.
- And, the ever-important element – will I get a raise/bonus/promotion?
Oftentimes, employees and managers alike loathe the annual review. I’ve heard it described as “time-wasting, only appeasing to the higher-ups, and pointless.” Perhaps the uber-formal format isn’t the best medium, but nobody can doubt its core objective: to make a plan for the future so you (and the company) can get where you want to be.
Do you ever conduct an “annual review” of your personal life? Probably not, and probably because you think of all its loathsome elements. Part of what we do with Prism clients is just that – but in much more fun, enjoyable way.
Why is this relevant to financial planning?
Have you ever felt as though you’re running in circles when it comes to your routine?
Throughout our years in practice, we’ve encountered many clients who love their primary line of work; but we’ve also experienced many who are doing it for the money. They feel burned out. They have no motivation to keep going at their current job, other than they’re afraid to leave without a plan (that they’re too afraid to develop.) We’ve even encountered people who have financial freedom but keep working, even they don’t like their 9 to 5 job. Why? These folks don’t have a plan for the next chapter in life.
This is where goal setting comes in. We don’t want you to be that person who stays at a job you hate solely to combat boredom. Since freedom requires planning and resources, we develop this plan well before you’re ready to execute it.
Even if you don’t think you can retire for 20 years or more – it’s important to take a minute and DREAM. If you had a blank calendar and could continue living your current lifestyle, how would you spend your time? What new hobbies or interests would you pursue?
How Do You Do This?
We use a unique series of exercises to help clients figure out what is most important to them, and make sure that they’re feeling fulfilled in all areas of life.
Take, for example, the “Wheel of Life.”
We examine 10 facets of life, such as family, leisure, and inner growth. Each facet is like a spoke on a wheel. We then ask a client to rate their level of fulfillment in each area on a scale of 1-10. They mark each spoke with a dot, 1 being close to the hub and 10 being farther away. We then have our clients “connect the dots” and see how well (or not) their wheel “rolls.”
This is a huge way to help figure out if a client’s life is in balance. We can then help craft a plan to focus on some of the “weaker” areas of one’s life while still remaining strong in others. The sample wheel above is one we’ve seen for successful executives. He or she may feel exceptionally strong in learning, work, inner growth, and finances. But perhaps health, leisure, or community are suffering. This is where we’d ask: what would it take to increase one of those low facets? We’ll then brainstorm both short and long-term ideas to improve.
Perhaps our successful executive cannot outright quit his or her current job at age 50. So, we’ll discuss ways to improve the present situation. Maybe they can work at home 2 days a week. This would then cut out commute time and allow extra time for things like a morning jog or breakfast with the family. Looking forward, we’ll set longer-term goals to redefine his or her identity as they get older. Implementing small changes and better managing your time now can allow for you to better transition to a new role when finances and life circumstances support it.
A final crucial element of goal setting is to have a partner who keeps you on track. At work, you have your boss (and the “annual review”) to formally ensure you’re sticking with the program. With your personal life, you might have a spouse or friend kind of keeping you on track…but not always.
It’s very easy to get caught up in the day-to-day with those who are most important in your life, so involving an objective third party can really provide you with some valuable insights.
This is where a financial life planner comes in. We’ll have a high-level view of your world, both from a financial and emotional standpoint. We can provide our opinions on major situations that you might encounter. For example, many folks consider purchasing a second home when retirement nears, sometimes because “their friends are doing it.” There are many pros and cons to this decision, beyond solely the financial implications. While you and yours may feel as though this decision makes good sense, we are happy to play devil’s advocate and discuss all possibilities.
Interested in learning more, or trying the Wheel of Life yourself? Send us an email at firstname.lastname@example.org.