WHAT IS “VALUES-BASED PLANNING?”

At the beginning of any client engagement and every year thereafter, we spend 30-90 minutes brainstorming & recording a client’s goals. Although everyone’s goals are unique, similar themes seem to arise – analyzing when a client can retire, organizing one’s finances better, making sure a client's spouse/kids are supported if something happened to them, saving for a first/new home, planning for travel, etc.

But today, we had a first. A recent divorcee stated that because her ex-husband spent frivolously on himself their entire 20 year marriage, her goal was to afford cosmetic surgery. People obviously have different opinions on cosmetic surgery, but it is not our job to judge whether this is a worthy expense. Instead our job is to help her make good “values-based decisions.”

In addition to the 30-90 minute goal exercise mentioned above, we ask clients at the beginning of our relationship to list their top 5 values. In her case, two of her top 5 values are Fairness and Self-Respect. After reflecting on her values, you can see that this desire for cosmetic surgery probably is stemming from the values of Fairness (her husband spent frivolously on himself, now it is her time to enjoy their wealth) and Self-Respect (she wants to feel better about herself by improving her appearance). So, in this case, it can be argued that she is indeed making a good values based decision for herself.

Now that we understand the “Why” of this goal, our job is to determine “How” she can accomplish it through traditional financial planning.