You’ve got big plans: two kids and a dog, an illustrious career, and maybe even an early retirement. But turning your dreams for life into reality takes a lot of planning, and many people struggle to transform goals into action.
This is where life planning comes in. Life planning helps you create the life you imagine for yourself and make the most of your time. Here’s how you do it.
What is Life Planning?
Life planning is the process of taking stock of your current situation in life, identifying your goals, and planning the steps needed to get from Point A to Point B.
When you create a life plan, you’ll establish your greatest priorities in life. These may be family, career, buying your dream home, financial security, community service, or something else. For each priority area, you’ll establish where you are now and where you want to be in one to two years, five years, and at the end of your life. You’ll identify the challenges that stand in the way of those goals, and create action plans to overcome obstacles and find success.
What Makes a Successful Life Plan?
Creating a successful life plan starts with a strong sense of self. You need to have an understanding of your passions, your values, and your strengths and weaknesses. You may not know exactly where you want to be 30 years from now, but you should have a rough idea.
When you’re creating goals for your life, it’s important to make them specific and measurable. Instead of saying, “I want to pay for my children’s college,” say, “I want to set aside $X into a 529 plan each year, so that each child will have $X to use for college.”
It’s also crucial to be realistic when you’re creating a life plan, otherwise you’ll be setting yourself up for disappointment. Factor in the unexpected such as children, repairs, and illnesses. Take into consideration what is happening now as well such as job layoffs or a family member’s addiction. A life plan is a plan, but sometimes plans change, and that’s okay.
What Does a Life Plan Include?
There’s a lot to consider when you’re planning out an entire life, and your life planning categories will depend on your personal priorities. However, there are a few basics that all life plans should include:
- Career: What kind of upward mobility and salary growth does your career path offer? Do you plan on making any career changes? If so, will you need further education?
- Retirement: At what age do you plan to retire, and how much money will you need to live comfortably? Will you stay in your home as you age or move into a care facility?
- Homeownership: Do you plan to purchase a home or rent? How much does a home cost in your market and how will you save for a down payment?
- Children: Do you plan on having children? How many, and at what age? Will they attend private school or public school? Will you save for your children’s college education, and how much?
- Life Insurance and a Will: How will you care for your family if something happens to you or your spouse? Who will handle your assets when you die, and how can they access them?
How to Get Started
If you’re not sure where to start, it may be helpful to meet with a financial life planner who can help flesh out your goals and create a financial strategy plan that supports them. It’s easy to feel overwhelmed by life planning, but a professional can help you break it down into manageable, actionable steps. And if you’re thinking you’re not ready for life planning, remember that no plan is set in stone. If your goals or circumstances change as life progresses, you can always revisit your life plan and adapt it to meet evolving needs.
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