Nearly all of us have dealt with “planning block” at some time in our lives: a situation where despite our best intentions, we haven’t crafted a plan to turn our dreams into reality. In fact, when I sat down to write this I was experiencing this problem- I knew what I wanted to accomplish with this article, but I found myself stuck on setting the necessary goals to get there.
Planning block is common in many areas of our lives, particularly when it comes to our financial ideals. To understand what I mean, allow me to explain: we all have dreams— the dream to retire, send our kids to college, to travel the world, just to name a few. We often define these dreams as goals, but in order for a dream to become a goal we must defy planning block by putting systems, processes and structures in place to achieve those goals.
Eliminate planning blocks & set goals with solid financial planning
Our planning blocks are caused by different factors. One of the biggest factors is life itself; just getting through the day-to-day can be daunting. Who can think about an estate or financial plan when we constantly have work, soccer practice and dinner to worry about? Fortunately, our dreams are able to blossom while we tend to our daily lives. We should remember that dreams are about the destination, but goals are about the journey. Goals are the roadmap that gets us there and they crave planning.
Less than 30% of financial decision makers in households report that they have a financial plan in place, so it’s no wonder that 1 in 3 Americans report having no retirement savings. Financial planning will not only help you define your goals, but it can help you see if those dreams are are realistic or attainable within your timetable. A financial plan helps you create spending habits around those goals and can identify money mistakes you may be currently making. One of the most important factors in planning and goal setting is measuring progress, and your financial plan helps you to do this. Your plan will help you feel more confident in your financial picture and can help you build and retain wealth to live more comfortably.
Reinforce your dreams with estate planning
The most common response I hear from clients when I ask why they don’t have an estate plan in place is that they haven’t gotten to it. This is planning block in action: it’s a predictable human reaction to avoid thinking of our own mortality. What we often must tell clients, however, is that estate planning is not just for themselves, it’s for the ones they leave behind; it also includes planning for unexpected difficulties in life such as incapacity. Some people think estate planning is only for the wealthy, but I assure you it is not. Working with a trusted attorney can prepare you and your family for medical decisions that may need to be made, care for your children, Medicare planning, minimizing taxes and avoiding the probate system.
The same is true for a financial plan- this is a system that anyone can use, regardless of net worth, to put those dreams of retirement or travel into attainable goals. Along with your financial planner you can set a road map for your future, and your planner will educate and empower you to see that your dreams may become a reality.
Financial and Estate Planning are Integral
With all this dreaming, planning and goal setting you may be asking yourself, “do I really need both an estate and financial plan?” Remember I noted earlier that dreams are a destination and that goals are the journey and roadmap to get us there. Creating a financial plan is a primary part of your roadmap and an estate plan can bolster it while serving as assurance that our legacy will go on after we reach our destination and offering protection for the unexpected bumps in the road. At NEIRG, we recommend partnering with both an estate planning attorney as well as a financial planner to create a comprehensive plan for yourself and your family. Working with a financial and estate planner who can also work alongside each other can push you past your planning block to turn dreams into goals and help you enjoy the journey.