A good financial plan has philosophical underpinnings that go beyond how you allocate assets, pay for your child's college, buy insurance coverage and all the rest. To get the most out of a plan, it's vital to take control of your life psychologically. Here are three ways to do that.
Getting control of your life can be vexing because fate doesn't always cooperate with our plans. An example: The last winter was relatively mild in the Upper Midwest, where I live, but cold on the East Coast. On a ski trip to Park City, Utah, I met some fellow skiers from New York who lamented that they traveled all the way across the U.S. when they would have had better snow in Vermont.
Although we plan our trips for the most temperate time, we can't control the weather when those dates arrive. What we can control, however, is how we respond when our plans do not turn out the way we envisioned.
In his best-selling book, Drive , author Daniel Pink advocates three essential elements that science proves motivate us: 1) autonomy - the desire to direct our own lives, 2) mastery - the urge to get better and 3) purpose - the yearning to contribute to something larger than ourselves.
As we work together to create a financial plan, we keep these three elements in mind to help us stay focus and motivated.
Autonomy in our financial plan is having choices. We all have constraints on our time and energy. It's what we do with them that's important.
Every time we say "yes" to one thing, we are saying "no" to something else. To see if we are on track toward financial independence, we look at our calendar and bank statements. Are they pointing toward those bigger yesses?
Mastery means that you use your resources to pursue your life's real wealth, which is comprised of the things that cannot be taken away from you - your intellectual, emotional capital and social capital.
For some, this may mean going back to school for advanced degrees; for others, a career transition or new business pursuit. It may also be to master a hobby or to help a troubled family member. If you consistently use your time, energy and money to work toward mastery in these areas, your financial capital will follow suit.
Purpose in your financial plan ought to go without saying. The point of planning and investing is not simply to have more money. While retirement may be a goal, what it stands for is what counts.
The extra trips to visit grandkids, the ability to volunteer more, the chance to pursue mastery of the hobbies we have set aside while we worked or the opportunity to fall in love with our spouse all over again are the things that make retirement meaningful.
When we make autonomy, mastery and purpose a part of our financial plan, the uncontrollable elements become less daunting.
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Joe Pitzl, CFP, is the managing partner atPitzl Financialin Arden Hills, Minn., and also writes atFinancial Fairway. Follow Joe on Twitter at @joepitzl . Learn more atwww.pitzlfinancial.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.