There are common misconceptions when it comes to making a life plan or a financial plan. So, what’s the difference between life planning and financial planning? One can help to inform the other, but very few financial planners or advisers have accreditations in both areas. Our team is trained with the globally recognised Kinder Institute of Life Planning, giving us extra skills to help our clients make more informed decisions.
Life planning vs. financial planning
Life planning mainly focuses on dreams, aims, and goals but does not necessarily factor in the means to achieve these aspirations. For example, a life plan might include targets to improve someone’s wellbeing, including family time, hobbies, holidays, career/business, or retirement.
Traditional financial planning focuses solely on figures, gains, and returns through different savings schemes and investment strategies. Although some financial advisers may ask you about your goals, this may rarely be in-depth, which means financial plans may misalign with true aspirations. Moreover, when you only look at numbers, you can overlook important aspects of life planning, which could affect your future choices and plans.
The Kinder Method
Our team has trained in the Kinder Method, which sets them apart from most financial planners and advisers. For a greater understanding of why this is important, let’s look at a quote by George Kinder, the founder of the Kinder Institute of Life Planning:
“The Financial Life Planner has all the skills of the traditional Financial Planner, but they know that the financial work does not come first in building a relationship. They need a full picture of the aspirations of their client before they can appropriately dive into the numbers.”
George Kinder
The Kinder Method focuses on the individual’s goals before developing a relevant financial plan. Instead of just looking at numbers, planners are taught to ask questions such as “what would you do if you had more time or money,” “what inspires you,” and so on. This method ensures planners gain full clarity on precisely what the client wishes to achieve in their life.
You can test this method by reading our previous blog, How to manage your time through life, or for more information, see our article about the Kinder Method.
Financial life planning
When you combine the key elements of life planning and financial planning, you can create a highly focused plan that aligns your aspirations to your finances. Using the Kinder Method in a financial planning exercise builds a solid foundation reflective of your true goals in life.
Below are five differences between traditional financial planning and our combined financial life planning approach:
- Advice is person-centred and not just focused on the money.
- Together, desires are prioritised, and solutions are found for problems.
- The aim is to empower clients to make decisions rather than telling them what to do.
- Planners listen deeply to the client instead of doing most of the talking.
- The aim is to inspire the client rather than solely direct them.
Put simply; we help you become the star of your own movie! We will inspire and support you to follow your heart’s desires, creating a clear vision and setting realistic timeframes so that you can take control of your life. Our clients enjoy the fact we take the time to listen carefully to their needs. We offer a complete planning package by putting their lives first instead of just talking numbers. Financial plans always work better if they align with people’s goals.
Our financial planners will learn what matters to you most so we can help you use your income and savings to achieve your aspirations. We also aim to help you maintain a level of financial security. In some cases, people can achieve financial freedom because they have planned their finances. As they say, a little planning goes a long way!
Why don’t you book a review with one of our experienced financial planners? We will discuss your aspirations and finances to help match your money to your goals. We’ll also provide you with an accurate financial forecast for the future, which looks at different scenarios that may affect your finances, such as care home fees.
Start your financial planning journey with us. Get in touch with our independent financial planners today.
Source:
https://www.expertwealthmanagement.co.uk/financial-planning-vs-life-planning-difference/
