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If I Could Teach Only One Financial Lesson

| June 15, 2016
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After 16 years in the financial services industry, I’ve had a lot of opportunities to see what is vital to my clients and what factors make the biggest difference in their lives and their finances. While there may not be one single “secret ingredient” that answers every question and addresses every problem, I believe there is a significant factor that can change your financial life.

When all is said and done, if I could give just one piece of financial advice, the answer is obvious to me: finding the “why” behind your goals. The biggest financial mistake that I see people make is blindly dealing with their finances without discerning what is most important to them and aligning their behavior to their financial goals.

The Importance of Your “Why”

Most of us know what is good for us. We know that it’s important to eat right, exercise, live within our means, and plan for the future. But just because we have the knowledge doesn’t mean we follow through. Why not? Because we don’t embrace the why behind the knowledge. Knowing your “why” gives you purpose and makes your actions more intentional. Having goals is to be applauded, but as we see with how quickly New Years’ Resolutions are forgotten, goals are often not enough. Goals tell you what you want, but they don’t provide the “why” you need to succeed.

In a newly released study conducted by Northwestern Mutual, we find that only 55% of Americans actually make disciplined plans to achieve their aims. In the same survey conducted in 2015, we see that only 40% of adults set goals and an even smaller amount (20%) have a written plan for their goals. Why is there such a lack in goal setting? I believe it is due to the fact that without understanding what motivates you, your goals lack purpose.

When you don’t have purpose, any goal or task becomes mundane and boring. We work hard and make sacrifices to achieve our goals, so if we lack a reason or even forget the reasons for our goals, it’s possible to lose the motivation and drive in attaining those goals. This is why it’s crucial to know your why and keep it in the forefront of your mind while living out your daily life.

Life gets busy and complicated at times, and it’s easy to lose sight of why we are doing what we are doing. When you lose that focus and vision, your decisions become cloudy and time is wasted. In my favorite quote by Roy E. Disney, he states that “when your values are clear your decisions are easy.” So how can you discover your core values?

Finding Your “Why”

Now that you can see the significance of seeking out your purpose, how do you do it? Ask yourself these questions: What motivates you? What do you love? What can’t you stop talking about? Values are not universal. They are individualized and personal and are the principles that intrinsically motivate you.

I believe that having a “values conversation” will open your eyes to the why and purpose you already have. This type of discussion will clarify what is truly important to you and goes deeper than just questioning what you want to do with your money. It digs up the true intentions behind what drives us, such as leaving a legacy, reaching a certain level of achievement and knowing you did the best you could with your time and resources.

It’s essential to focus on what’s most important in life and discern what activities contribute most to your quality of life. When you align your core values with your behavior, you realize a high level of satisfaction with your life, and you learn to delegate what is less important, so you have more time and energy to spend on your values.

What Next?

Once you know what it is that truly drives you, what happens next? Here are three steps to applying your “why” to your finances:

1. Discover Your Values

In Bill Bachrach’s book, Values-Based Financial Planning, he states that your values are the “emotional why” behind the “tangible what” of your goals.

2. Determine Your Goals

Using your values, decide what it is you are striving for. This could be a vacation home, retiring young, or a college education for your kids.

3. Strategize a Financial Plan

Work with us to make sure your financial situation is in sync with your goals and values. Delegate the details to us so you can keep pursuing your passions. At Haydel Biel & Associates, we are happy to help you clarify your core values and work with you to ensure your finances are in line with those values. Contact us today at (626) 529-8347 or email me at ricky@hbawealth.com.

About Ricky

Ricky Biel, CRPC® is a wealth manager with Haydel, Biel & Associates, an independent financial advisory firm serving individuals and families near Pasadena, California. The firm was founded in 2004 by Chris Haydel and Ricky Biel with a desire to provide unbiased, client-centered, community-based financial advice. Together, they built a practice that has grown into a family of caring, smart professionals committed to blending proven investment methodologies with cutting edge financial technologies that make it easier than ever to accomplish your goals. To meet and see how the HBA Wealth team may be able to help, contact them today at (626) 529-8347 or email Ricky directly at ricky@hbawealth.com.

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