03/12/2014 02:31 pm ET Updated May 12, 2014

"What's Your Financial Plan?" Is a Dumb Question

This might be a shocking title coming from a guy who is in the financial planning business, yet I'm sticking with it because it's true. How can you have a plan specific to your finances? Can you really separate your financial plan from your life plan? When the question in the title is asked like this, our brain goes from our life to our finances, immediately narrowing the scope of our thoughts and vision.

For example, you could be walking down the street minding your own business, thinking about the great and wonderful things you have planned for your life, your career and your family, and then some jackass comes along and asks you about your financial plan. Your answer may sound something like this:

I actually don't know. I have a bunch of things going on right now. I have bills to pay and debt to manage. My retirement account is out there somewhere and your guess is as good as mine as to whether I'm contributing enough or investing correctly. My job takes up a lot of my time and I don't make as much as I think I should. Fortunately, we save enough for short-term family vacations to release some of the stress, but other than that, I really don't have much of a financial plan.

It's amazing how the word "finances" immediately throws us head-on into our current circumstances. From this standpoint you may not see many options for what to do from a personal financial perspective. Guess what? That's completely natural.

When it comes to planning for your future, finances are only a part of the process, albeit, an important one. If you step back and take into account everything that comes into play when planning for your future, you can view your finances as simply a tool in the toolbox that you can use to help you along the way. Centering the conversation on this one tool does not work. It's like heading out on the golf course with nothing but a 7 iron (I actually had a friend who played 18 holes with this one club... and it wasn't pretty).

I've created a process for you to use for this big picture planning. It's called Dare to D-R-E-A-M: Discover... the life you love, Recognize... the obstacles in your way, Evaluate... your current financial circumstances, Architect... a roadmap for your future, and Mobilize... and get into action.

From this standpoint, you can look beyond your current circumstance and envision a life that you truly want to live. By brainstorming different choices, your mind will naturally expand and you may start to think about what you really want, and not simply what your current circumstances will allow you to have. That's a big difference!

Once you have established what you want, the next step is to identify the obstacles that are in your way. What are the physical, emotional, financial circumstances and beliefs that keep you where you are today? These are like the monster under the bed. Once a child takes a look and sees that the monster doesn't look so scary, she can go to sleep soundly. This is no different for you. It's often the fear of the unknown that stops you in your tracks. Shine a light on that unknown and suddenly it's not so bad.

From here you can actually check your current financial circumstances, taking a look at cash flow (income and expenses), assets (home, car, investment accounts, etc.), liabilities (typically this is debt: credit cards, mortgage, car loan, etc.) credit score, benefits through work... and the list goes on.

At this point you have identified where it is that you want to go (a life plan if you will) and pinpointed where you are today. Establishing these two points is of utmost importance, because it allows you to start the fourth step which is to architect the roadmap for your future. This is the easy part as it's simply a game of connect the dots, simply asking yourself the question, "How do I get from point A to point B?"

Finally, and most importantly, once your roadmap has been drawn up, it's time to take action! The best plan in the world is nothing more than a bunch of well-constructed thoughts unless you execute it. Taking small actions often will have you move forward and that's the key to achieving any goals.

It's this type of planning that makes what I do worthwhile. Simply focusing on the financial circumstances of your life makes it hard to get out of your own way. Take a stab at working through the D-R-E-A-M process and let me know how it goes by commenting below. I think you'll see things for what they are, and from there, the power is in your hands. It's no longer your financial plan... it's your life plan.

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