Financial Life Planning and Tax Resolution

Financial life planning is about more than just money. A financial life planning approach can provide a deeper meaning to the management of personal finances. Every person going through the tax resolution process needs a vision, purpose, and a plan if they want to succeed. George Kinder is a well respected financial planner and a leading proponent of the life planning movement within the financial planning industry. His financial counseling process includes three questions that are popular for their ability to help clients focus on what really matters to them about money. While I have adapted a version of these questions for the tax resolution client, similar questions are also asked of my Fee Only financial planning clients.

The main purpose of this exercise is to begin thinking about what you want your money to do for you. The first question is designed to initiate the process of thinking about all of life’s possibilities; the second and third questions are created to help people with tax troubles focus on their priorities in life.

Since the accumulation of excessive tax and consumer debt has such an immediate and overwhelming impact on household finances it is easy to lose sight of long-term goals and dreams. Looking beyond the current state of financial stress is an important way to help prioritize goals during the tax resolution process. It also helps to have something to work to achieve while reinforcing the need to attack your tax problems with passion and enthusiasm.

The life planning questions below should be used to help you identify what you want to get out of life. Since money plays such an integral role in our lives it is important that you are able to understand your values that lie beneath the surface of your financial world.

1. Imagine that you have paid off all of your tax and consumer debt. You owe absolutely nothing and have enough money to take care of your needs, now and in the future. How would you live your life? Would you change anything?

2. Imagine that you visit the doctor and he or she says you have only five to ten years to live. You will not feel any pain or sickness, but you will never know when death will actually come. What will you do? Will you change your life? How?

3. Finally, now try to imagine that your doctor says you have only one day left to live. Ask yourself: What did I miss? What did I not get to be or do? Do I have any regrets?

This three questions exercise is designed to tap into the heart’s core. What are your values? What is your vision?

Now is the time to start thinking about a life without any debt. Setting a goal to resolve a tax liability is usually the #1 priority during the tax resolution process as it should be. It can be difficult to look beyond the stress of the here and now when it comes to tax and financial matters. Establishing life planning goals add more meaning to the tax resolution process. If you have avoided debt and do not have a tax problem, these questions are just as relevant during your financial life planning journey.