Financial Planning Is Like A Jigsaw Puzzle

April 04, 2023

Financial planning should help you clarify and prioritize the way you want to live your life and then utilize your assets, both financial and non-financial, to support the achievement of those goals. It should help you live a life in line with your core values and what is most important to you and your family.

To help frame this discussion, I often ask prospective clients the following question: What is the most important piece of a jigsaw puzzle? The most common answer I hear is a corner piece. However, the most important piece of the jigsaw puzzle is the picture on the cover of the box it came in. If you can see what the puzzle looks like in advance, it's much easier to put it together and will save you a lot of time.

The same holds true for financial planning. If you have a clear vision of what you want your life to look like, you stand a much better chance of having your vision become a reality. You will also save a tremendous amount of time because you know what you want and will be less distracted by alternatives that do not help you achieve your vision.

Now, you still need to go through the planning process to include budgeting, reviewing your investments, insurance planning, retirement planning, estate planning, etc. But, once you have a clear vision of your life, everything else becomes simpler. Once you know what you want your life to look like, you can focus on a plan that helps you get there.

This will help you eliminate distractions, simplify your life, reduce mistakes, and save time. For example, budgeting will become easier. Most people do not like to budget because they do not like restrictions. But if they know that by reducing impulse purchases on relatively meaningless items they will be able to achieve bigger goals more in line with their values and what brings them true happiness, it becomes easier to do so. This approach can then be applied to every step of the planning process. Starting with a clear vision brings focus and clarity to the planning process.

While it requires more time up front, it will save you many multiples of that time and provide better results. And time is our most precious asset. So, take the time to create a clear vision of what you want your life to look like, and then use that vision as a guide for your financial planning.