Taxes and Personal Planning

We’re going to keep things crisp and to the point today as many folks are likely enjoying a long weekend with friends and family.

In my new Personal Planning Guidebook, which is a free download here on my website, I talk about the relationship between your personal plan and your financial health and wellbeing. In my opinion, it’s impossible to have a solid plan for your future state that does not take into account the realities of one’s current financial position.

In the Personal A3 exercise from the Guidebook (shown below for reference), financial and economic considerations will enter into a number of boxes with asset inventory, personal blockers, skill/tool set gaps, goals, and metrics for success being the most likely to have at least some reference to your financial condition and/or level of financial literacy.

So where am I going with this? With ten days to go until Tax Day in the United States, many of you are balancing the joy of the weekend with the drudgery of getting your taxes done. While I agree that completing tax returns is much more complicated than it needs to be, I recommend looking at tax season with a glass-half-full mindset. Put plainly, there’s no better time than the present to invest time developing and/or refining your personal plan. You’re already sifting through financial records and creating a semblance of order from the chaos of a year’s worth of economic activity—why not take the opportunity to build your plan when your financial position is top of mind?

I purposefully used the word “drudgery” to describe most folk’s experience with tax season. We can take some of the drudgery out of the equation if we shift our mindset to use tax season as a tool to improve financial literacy. Instead of going through the motions to fill out a bunch of forms, compile supporting documentation, write a check to the government, and stuff it all in a drawer, never to be seen again, use that effort and information to build a plan that will move you and your family forward.

Building or revising/refining your personal plan during tax season also has the knock on effect of moving personal planning from the revelry of the turn of the year to a time where you can replace pie-in-the-sky New Years’ resolutions with a more realistic plan that has a better chance of becoming a reality.

So that’s it! Have a wonderful weekend, download the Guidebook, and start planning!