This article was published in the "Martinelli Newspapers" in the March 2, 2006 weekly issue of The Westchester Crusader, The Rye Chronicle, The Eastchester Record, The Pelham Sun, The Sound View News Home News & Times, The Mt. Vernon Independent, Harrison Independent
and North Castle News

Life and Money - Financial Planning Basics - Part 2

By Frank Sisco, CPA, PFS

Copyright 2006 Frank Sisco

(Word count =  1,050 including 73 words for About the Author)

Last week's column was the first part of the discussion of the basics of effective personal financial planning.   If you are mindful of certain general principles, you will find that financial planning does not need to be complicated or stressful.  As you become more involved in the financial planning process and the related key decisions, either with the guidance of financial advisors or on your own, you can use these basic principles as a guide.  Of course these are general guidelines and all of them may not apply to your own situation.  As detailed in last week's column and as recorded on the website www.LifeAndMoney.com, the nine general principles are as follows: 1. Be personal, 2. Stay in as much control as possible, 3.  Be conservative and protective, 4.  Strive for simplicity, 5.  Focus on making more money from your skills, 6.  Be frugal with money and time, 7.  Prioritize, 8.  Increase your value to others, and 9.  Leverage relationships and time.  Please continue with your much-appreciated feedback to help me to write essays that you find to be pertinent and valuable. 

This week's column focuses on the following three principles:

10.  Develop your purpose. - You may be able to create a significant amount of resources, involving time and money, by reevaluating your life's purpose and realigning to it.  Sometimes our purpose is not clear and we choose wealth, property or fame, at the expense of our important relationships.  Other times, we hop from career to career in search of meaning, later to find it was already deep within ourselves.  Evaluate what is truly important to you and assess your boundaries, by taking on small new projects.  Examples are a volunteer activity, a home remodeling chore, a new artistic hobby, visiting old relatives and friends, creating deeper relationships with business associates, reading a best-selling self-help book, writing a song, and so on. Even put yourself into uncomfortable situations and observe how you handle them.  Be patient with yourself and others around you as you develop ideas of what makes you feel fuller and happier.  Take these experiences and place them into the context of your life's journey thus far, and then evaluate what you believe is your main life purpose.   Keep evaluating and revising your purpose, with its several layers, so that you can be in better sync with your purpose.  For example, as a nurse your main life purpose may be to help people become more comfortable and happier, your narrower sub-purpose may be to administer to patients in a hospital in a loving empowering manner, yet professional and efficient.  If you change your career to being an elder lawyer, you may not need to forsake your overall purpose but rather merely to adapt a new sub-purpose to different circumstances, thus providing some consistency and stability in your life.

11.  Express yourself effortlessly. -  Harboring feelings can cause a lot of stress. Doctors and psychologists often say "better out than in."  Keeping so much inside can have a very detrimental effect on your financial well-being as well as your physical health.  It prevents other people who are in a position to help you, including advisors, from seeing the underlying problems.  Strive to share yourself more with others, starting at home, and then branch out to the office or factory, the community and your advisors. 

12.  Heal important relationships within your family. - No one is free from the concerns or complications of difficult relationships.  Most of us, when faced with a problematic family member, take a detour rather than facing it head-on and doing whatever needs to be done to repair the relationship.  Unresolved issues in relationships could cause havoc not only on one's peace of mind and happiness, but also on one's health and financial well being.  Often, the effect is felt after a death and the allocation of assets.  Take Ellen who has written out two of her four sons from her will because of a disagreement years ago.  If she never resolves it, forgives them and gets the missing sons back into the will, then ill feelings and imbalances in the sharing of assets will live on for generations.   Another example is about how two brothers, who never communicated well with each other, found themselves arguing often over who was handling more of their mother's needs as her health declined due to Alzheimer's. For several years, the older brother, who took over more healthcare responsibility, warned the younger one to be very frugal and avoid any large expenditures because at any moment their mother's assets might run out and they each might have to pay for very high long-term care expenses.  When the mother finally passed away, the younger brother learned that the mother had an amount of assets more than sufficient to handle the long-term care expenses for many years, and the older brother's caution was unfounded. If they had been communicating more honestly and more thoroughly with each other, this unfortunate misunderstanding could have been avoided.  For years, the younger brother had lived not as fully as possible. He avoided buying a house and sending the two children to better more expensive schools.

Children often are conspicuous spenders as a way to assert independence from a dominating parent, wasting money and time for the whole family.  Some husbands and wives let their relationship drift into despair and then divorce, often resulting in financial chaos. What might have been needed was better and more loving communication earlier in the marriage.  In business partner entanglements, improving communication can foster understanding and can save a business.

Take the first step toward resolving difficult relationships.  Let your fairness and forgiveness lead the way.  Get the help of other family members or advisors if necessary.   Heal and watch your finances improve greatly.

Next week's column deals with suggested steps on how to choose a Certified Public Accountant for you or your business.

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About the author

Frank Sisco is a CPA and Personal Financial Specialist, and author of several articles about personal finance and issues of life and money.   His firm, Financial Management Corporation, is located in Harrison, NY.  Frank makes his home with his wife and daughter in New Rochelle, NY.  He can be reached at 914.381.3737 or by email at ideasmoney@aol.com, or visit his website at www.LifeAndMoney.com which contains this and prior articles.