When you visit a financial planner, it can be challenging to articulate your goals, which is often a future far away from your present circumstances.
‘The 7 Habits of Highly Effective People’[1] is an important book which offers practical advice on how to become a more effective and successful individual. It encourages readers to develop habits that will help them to become more productive and better able to manage their time, resources, and relationships. The book emphasizes the importance of setting goals and developing strong personal values.
Habit Number 2 in this book is to “Begin with the End in Mind”
It is a reminder to take a step back and think about what your long-term goals are and how you plan to reach them. Having a clear idea of what you want to achieve in the future is essential for making informed and strategic decisions today. When it comes to financial planning, beginning with the end in mind can be an invaluable tool for setting yourself up for success.
Financial planning is the process of setting and achieving financial goals. It involves creating a plan to ensure your financial security and freedom in the future. When done correctly, financial planning can help you reach your goals faster and more efficiently; however, without a clear vision of what you are trying to accomplish, it can be difficult to make the right decisions.
Beginning with the end in mind helps you establish a strategy for reaching your financial goals. When you have a clear idea of what you want to achieve, you can make better decisions about how to get there. For instance, if you are looking to save for retirement, you can begin by figuring out how much money you need and how long you have to save. Then, you can create a budget and track your spending to make sure you are staying on track.
Another benefit of beginning with the end in mind is that it helps you anticipate potential risks and make informed decisions. When you have a clear vision of what you want to achieve, you can plan ahead and prepare for any potential risks that could derail your plan. For instance, if you know you are saving for a large purchase in the future, you can start saving early and plan for any unexpected expenses along the way. It is also important when choosing the level of risk you are taking with respective investments.
Finally, beginning with the end in mind can help you stay motivated and focused. When you have a clear plan of what you want to accomplish, it can be much easier to stay on track and reach your goals. This is especially true when it comes to financial planning, as it can be easy to become overwhelmed or discouraged by the long-term nature of the process. By having a clear idea of what you are working towards and why, it can give you the discipline to take the right action.
In summary, beginning with the end in mind is an essential part of creating a successful financial plan. It helps you create a clear path for reaching your financial goals, anticipate potential risks, and stay motivated throughout the process.
If creating a vision and strategy for your financial future is something you need help with, please get in touch with a dedicated financial planner to help you along the way.
[1] Stephen R. Covey. The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change. Free Press, 1989.
