(Watched the video and ready to get started? Click here.)

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Before we dive into the Statement of Purpose and how we'll use it, I'd like to offer a little context…

 

Advisors are taught that financial planning means helping clients identify & clarify goals, turning those goals into quantifiable outcomes, and then evaluating & presenting plans of action that are likely to lead to those outcomes. That’s what I learned while becoming a Certified Financial Planner™. Sounds pretty good, right? And it is, but it also misses something important: your goals are part of the story, but they aren’t the whole story.

 

The conventional approach places your goals at the finish line of financial planning, the happily-ever-after apex of your financial life, but the goals aren't really why a person wants help making money decisions or feeling more at ease when thinking about the future. Goals also shift and evolve over time. Think back on yourself 20 years ago. Did that person have the same goals that you do today? What are the odds that your goals will be the same 20 or 30 years from now? And, of course, if we work together successfully, you’ll start to cross some of them off your list. So what’s the bigger picture motivation behind those goals?

 

Before we can create any kind of meaningful plan, we need to be clear on the capital-w Why.

 

Why is money important to the life you are building for yourself? What happens once you retire? How will you feel when you send your kids to college? Or buy that new house? What will you be able to do, have, or be that you cannot now – and how can we start making decisions today that will help you get there? That's why people turn to financial planners for help: to make changes now for a better life later (however you choose to define that better life).

 

Instead of asking you to identify your goals and placing those at the top of the financial planning pyramid, let's create a Statement of Purpose – one that encapsulates who you are, who you want to be, and both present & future goals – and make that the focus of our work together.

 

You can think of your Statement of Purpose as your “Big Why”. (Your Ten-Year Plan for a Remarkable Life will also help with this exercise.) Do you want to spend more time with your family? How about travel? Or give back through volunteer work or giving to charity? Put it in your Statement of Purpose! ("I want to travel with my family and give back to the community." Pow!) This doesn't need to be some far distant future – your Statement of Purpose should be an umbrella that includes both the life you want to live right now and your aspirations for the future.

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Here's a non-financial example. Let's say that I want to be more physically fit. Before I grab my running shoes or start hitting the gym, I should take a moment to clarify why – my Statement of Purpose. For me, being physically fit allows me to feel better in my body & my mind, and also makes me feel more confident as I move through the world. A Statement of Purpose could be "I want to feel good in my body & mind and be more confident." Great!

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Next, we’ll use your Statement of Purpose to create two “I Am” Statements, one around identity (I am this kind of person...) and another about priorities (I prioritize actions that...), that will help you build & stick with good habits. These two statements should affirm that you are right now today – not sometime in the future, not that you hope to someday be – the type of person who lives according to your Statement of Purpose.

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Continuing with the example above, my first "I Am" statement could be “I am a physically active person.” The second part asserts how you make decisions: “I prioritize decisions that lead to better health.” Not only will your “I Am” Statements make it easier to build & stick with good habits, they also serve as a quick gut check when you are tempted to do things that go against your purpose. (Does a person who prioritizes good health skip the morning workout? Nope, and neither do I.)

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Finally, we’ll draw a line from your Statement of Purpose through your “I Am” Statements to your goals. We can think of goals as mile markers on the journey; they aren't the destination, but they can help you recognize when you are headed in the right direction. You may have already identified some financial goals (maybe as part of our work together), but not everyone walks into the financial planning process knowing or being able to fully articulate goals. That's ok! The goals should start to reveal themselves based on the Statement of Purpose exercise.

 

Some common goals are retirement, paying for a child's college education, or paying off debt like student loans or a mortgage. You might also want to travel more, open a business, or make plans so that your family doesn't need to support you in older age. Whatever your situation may be, your Statement of Purpose should resonate deeply with your goals – and perhaps reveal new ones! (I’m a big fan of limiting yourself to only three goals at a time so that things are manageable and you don’t get overwhelmed.)

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Now that we know your Statement of Purpose (your Big Why) and "I Am" statements (who you are and what you prioritize), and your goals, we can start building your Action Plan. This is a list of next best steps to help you get where you want to be, as well as a record of everything you accomplish along the way.

 

Let’s circle back to that fitness example. One goal could be to eat healthier. Seems like a good place to start! To get started on my Action Plan, I’ll ask myself: what are three specific, quantifiable actions I can take right now to eat better? I can plan my meals in advance; I can stop buying the most tempting snacks at the grocery store; and I can skip dessert during the week (which still allows me a treat on the weekends). Those are three great next steps! I now have a clear way to move forward for that specific goal. Now it’s just rinse and repeat for each goal, adding new goals as old ones are completed.

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We have now connected your Statement of Purpose, the type of person that lives that kind of life (your “I Am” Statements), your goals, and finally an Action Plan that will help you stay on track on your journey. This is simple and powerful exercise will help us stay focused on what matters most as we work together. I can’t wait to get started!

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Please click this link to get started on your own Statement of Purpose worksheet.

 

Thanks!

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Timothy Iseler, CFP®

Founder & Lead Advisor

Iseler Financial, LLC | Durham NC