Don’t neglect the softer side

Don’t neglect the softer side

September 03, 2021

One of the best parts of being a financial planner is helping people find meaningful answers to important life questions. Sometimes the questions are straight-forward such as: do I have enough to retire; when should I take Social Security; do I need more life insurance; how should I structure my portfolio. These kinds of questions are easy because are they are data-driven. Get the data, crunch the numbers and the answer is usually pretty clear.

I’m not saying these questions aren’t important. In fact, answering them is essential for a sound financial plan. This is why financial planners usually start by asking you to gather reams of data. They ask you to dig through your check registers and credit card statements to get a clear sense of how much money you spend. They pore over copies of pay stubs and tax returns to figure out how much you earn. Insurance policies, mortgage statements, investment account statements and employee benefit summaries are all important sources of data for financial plans.

There is another vital part of financial planning—what I call the softer side—that is often overlooked. The softer side of financial planning raises questions about values and goals. It often challenges the status quo. Coming to grips with this softer side requires introspection and introspection can be painful.

If you are married or involved in a long-term relationship, the softer side of planning may require you and your partner to discuss things that are emotionally fraught. However, I have also seen that some of the most impactful financial planning happens when clients are willing to engage in this way. The core message is this: If you are going to do a financial plan, don’t neglect the softer side.

Several years ago, a couple engaged us to do a financial plan. They had recently sold their business leaving them with plenty of financial resources. As we worked through their financial plan, we could see that some aspects of their financial lives did not align with their values. For example, travel was very important to them. Yet they worked long hours as employees in the business they had sold so they could afford a large home they really didn’t want. Their financial plan helped them see this disconnect. They sold their home, quit their jobs and started traveling more. Their planning helped them create a life that was more consistent with their values.

With that in mind, here are 12 “soft” questions you should ask yourself as you work through your financial plan. If you have a spouse or a significant other, you might use these questions as the basis of a very fruitful discussion.

  1. What is your greatest source of joy?

  2. What are your top five priorities right now?

  3. Do your priorities align with your source of joy?

  4. If you knew you only had three years to live, how would your priorities change?

  5. What are the top three problems in your life that money can solve?

  6. What are the top three problems in your life that money cannot solve?

  7. If money were no object, what would you be doing right now?

  8. Do your financial habits create for you a world of abundance or a world of scarcity?

  9. Which is stronger within you, your desire to be part of the group or your determination to fulfill your vision?

  10. Do you tend to be an optimist or a pessimist?

  11. What do you most fear about your financial future?

  12. What do you most eagerly anticipate about your financial future?

Steven C. Merrell MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions that you may have concerning investments, taxes, retirement, or estate planning. Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA 93940 or email them to: