Clarifying Your Financial Priorities

As a financial adviser, what I have found in all my years of working with people and their money, is that financial clarity is often missing for the majority of people. Often they stumble through life, doing the things that other people do, buying a house, getting into debt, topping it up for holidays or a pool or upgrading their house every few years. They may have a budget, they may not, but even if they do, it is not in the pursuit of any clear priority.

These are not bad things. Getting into a house for example is often the single biggest thing that will help most kiwi’s build an asset base and that is a good initial goal for a lot of people. But once you’re in the house if you just drift for the next 30 years you’ll be missing some big opportunities. Just having a goal without questioning whether or not it’s the right goal for you and whether it will take your life in the direction you’d like it to, means you can waste a lot of time chasing other peoples dreams. Without clarity you’ll muddle through. if you’re not clear about what you want then when you come to see a financial adviser, they won’t be able to help you to get there.

It’s not just about having a financial goal. Anyone can do that. It’s about doing the thinking about what is most important to you over the short and long term, and why that’s important specifically to you . That should be the basis for setting your priorities.

If you have a clear goal when you come to see a financial adviser, you’ll get advice that will take you closer to it and often you’ll get strategies and tips that will take you there faster.

This list of questions is designed to help you clarify and prioritise what is important to you.  It’s not an exhaustive list by any means but a good start to help you get clearer about where it is that you want to go.  Money is just a tool that will help you achieve things. These questions should prompt you to think about how you would like to use it to achieve what’s important to you.

Please have a pen and paper ready. Rather than read through, answer the questions one by one as you go.

1.     What’s important about money to you? Think about this one for a while before you answer it.

2.     What are your short-term financial priorities (within the next year)?

3.     What are your long-term financial aspirations (5, 10, or 20 years from now)?

4.     Are there health factors that will play into your finances and if so how?

5.     How do you envision your ideal lifestyle?

6.     What would your ideal lifestyle take in terms of finances?

7.     Does your ideal lifestyle evolve as you age and if so how? 

8.     What major life events do you anticipate in the next few years that may impact your finances?

9.     Are there specific assets or experiences you want to acquire in the near future?

10.  How much money would you like to have saved for emergencies?

11.  Do you have any outstanding debts that you want to pay off?

12.  Are you planning for major expenses such as education, a home purchase, or starting a family?

13.  What level of financial independence or retirement lifestyle do you want?

14.  Do you have specific philanthropic or charitable goals?  Would these require money or time or both?

15.  How comfortable are you with investment risk, and what returns are you aiming for?

16.  What is your desired level of monthly or yearly savings?

17.  Are you interested in building passive income streams, such as through investments and if so what is your end goal with this and why?

18.  What is your attitude towards homeownership, and do you have a goal related to it?

19.  How important is travel and experiences in your financial plan?

20.  What are your expectations for your children's financial support or education funding?

21.  How have you prioritised spending on lifestyle and entertainment versus saving and investing? 

22.  Are you happy with your current balance between these two (spending vs saving and investing) and if not what would you like to be different?

23.  Are you considering starting your own business or pursuing entrepreneurial ventures?

24.  How much would you like to allocate for personal development and education?

25.  Do you have a specific timeline for achieving certain financial milestones?

26.  What level of financial security and peace of mind do you aspire to have and what does that look like? How would you know when you have it?

27.  How do you plan to handle unexpected financial challenges or economic downturns?

28.  What role do legacy and estate planning play in your financial goals?

29.  How would you define financial success on a personal level?

30.  Have you considered how your financial goals align with your values and principles?

31.  Regarding your answer to question 1, why is that?

32. Now of all the ‘priorities’ you’ve come up with so far, what is the very most important, not negotiable goal?

33. How close are you to that? Define the gap. Define the timeframe you’d like to close it in.

I hope, if you have taken the time to go through these one by one and answer each question fully before you move on, that these questions should help you to get closer in clarifying your financial goals and then drilling down to your most important priority. If you’d like any help going through this process, get in touch. We are always happy to help and it’s our mission to help you get ahead, whatever that looks like for you.