Advertisement
Financial Planning

To Make a Financial Plan, You Need a Financial Purpose

Five questions to ask yourself to identify what’s really important to you, your future and your legacy.

What is meant by “purpose-driven finances”?

It simply means that money and wealth are just numbers on a ledger; they are nothing without a purpose attached to them.

In retirement, that purpose is different for everyone. But remember, this is not about rate of returns. Instead, the question is, “What do you want the wealth you have accumulated to do for you in retirement?” When I ask people that, most often their responses include maintaining a comfortable lifestyle, giving to charity or providing for their family. However, as the retirement years pass, the purpose for the money can change as circumstances change.

Advertisement - Article continues below

Let me give you an example. One couple I worked with thought they had their finances and purpose in place – until their son passed away. When that happened, they decided they wanted to provide for their grandchild’s needs through college. We met and adjusted their financial plan to help work toward this new reality – and new purpose.

Even my own financial purpose has changed.

I grew up in a modest home, and there wasn’t extra money around. My financial purpose was to live comfortably and provide for my family in a way I had never known. But my purpose changed when someone challenged me to look at the giving side. Instead of the purpose being about us, I began to make it about others. This was a defining moment in my life.

Advertisement
Advertisement - Article continues below

By planning with a purpose, you learn that having all the money in the world will not bring happiness, but having a purpose can bring you the happiness you seek. Think about Ebenezer Scrooge, who hoarded an enormous amount of wealth, but lived a life of misery. It wasn’t until he donated to charity and provided for the care of Tiny Tim that he realized true happiness.

Advertisement - Article continues below

In my 30 years of experience as a financial professional, I’ve found that the better I get to know my clients, the more we are able to build a trusting relationship. After all, they want the assurance that their lifetime of savings will be preserved. In my first meeting with a client, I ask these basic questions in an effort to ferret out their financial purpose:

  • What do you need to live the lifestyle you want? This is essentially asking what it is you really want to accomplish, beyond the basics of food and shelter. Only you can answer that.
  • What are your fears and concerns about the future? Are you worried about your health? Are you concerned about financial security?
  • Which relationships are important to you? Do you want to provide for the important people in your life?
  • What are your interests? Do you like to travel, attend sporting events, go to plays or garden?
  • What is your vision of a happy, healthy retirement? When you have a financial purpose, you can gain motivation, and hopefully, your outlook will be healthier.

What are your answers to these questions? Once you establish a purpose for your money, it will help guide you when it comes to investing, saving, making charitable donations and spending for the rest of your life.

Rozel Swain contributed to this article.

Alfie Tounjian has the CERTIFIED FINANCIAL PLANNER™ certification and is president of Advantage Retirement Group and Tounjian Advisory Group LLC. Alfie is an Investment Adviser Representative and insurance professional. He has been in the financial services industry for more than 30 years. He is author of the upcoming book “The Retirement Fairway” (available in early summer).

Investment Advisory Services offered through Tounjian Advisory Group, LLC, a Registered Investment Adviser.

About the Author

Alfie Tounjian, CFP, Investment Adviser

Founder & President, Advantage Retirement Group

Alfie Tounjian is a Certified Financial Planner™, an Investment Adviser Representative and founder and president of Advantage Retirement Group and Tounjian Advisory Group LLC. He is also a licensed insurance professional. He has been in the financial services industry for more than 30 years. His practice focuses on wealth accumulation, asset protection, retirement income strategies, IRA and 401(k) rollovers, life insurance and annuities. Tounjian shares his financial philosophy weekly on his "Saving the Investor" television and radio shows. He resides in Fort Myers, Florida, with his wife, Tommie, and their son.

Advertisement

Most Popular

What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
HSAs Get Even Better
Financial Planning

HSAs Get Even Better

Workers have more options with flexible spending accounts, too.
July 2, 2020
17 States That Will Gain or Lose Electoral-College Votes After the 2020 Census
Politics

17 States That Will Gain or Lose Electoral-College Votes After the 2020 Census

Every 10 years, the 435 seats in the House of Representatives are reassigned based on the results of the U.S.
July 2, 2020

Recommended

Find a Great Place to Retire
happy retirement

Find a Great Place to Retire

Our cities provide plenty of space to spread out without skimping on health care or other amenities.
July 2, 2020
Searching for the Perfect Place to Retire
Empty Nesters

Searching for the Perfect Place to Retire

We home in on two places with less traffic and lower costs. 
July 2, 2020
Hail to Your Finances, Regardless of Who Wins Presidency
retirement planning

Hail to Your Finances, Regardless of Who Wins Presidency

Don’t try to navigate your investment choices based on election uncertainty. And don’t wait to find out who wins in November to make financial decisio…
June 30, 2020
Resources for alternative forms of transportation needed by many older adults
retirement

Resources for alternative forms of transportation needed by many older adults

For many older adults, having an alternative mode of transportation may be the difference between independence and social isolation.
June 29, 2020