Make a Plan That ‘Future You’ Will Love
Money can’t buy love, but it might fund happiness – if used wisely. By understanding the power of intentional planning and decision-making, we can align our financial goals with our personal aspirations.
That principle lies at the heart of our intent-driven approach: crafting a wealth strategy that leverages financial resources to achieve what truly matters in life.
What we do together
The first step in our approach is to explicitly identify the primary purpose, or intent, for your wealth. We then define personal goals that support these intentions, each with four key components: a dollar amount, a label, a time horizon and a priority level.
These goals are organized into categories, or buckets, such as liquidity, lifestyle, legacy and perpetual growth. By aligning different pools of capital with strategies tailored to each bucket, we can effectively focus our wealth on achieving long-term.
The utility of mental accounting
In making a plan, we embrace the behavioral bias of mental accounting. This is the process by which we value money differently depending on the source or use of that money – $10,000 in casino winnings just feels very different from a $10,000 pay raise; $10,000 earmarked for gifts feels different from $10,000 targeted for home maintenance. Not surprisingly, we spend casino winnings more carelessly than salary; we buy gifts more joyfully than we pay bills.
This may not be entirely rational, but it’s quite useful. It prevents us from getting overwhelmed and, if done intentionally, allows us to pursue multiple financial goals with efficiency and focus.
Defining the future
We’ve all experienced the challenge of sticking to a diet, exercise routine, or financial strategy, only to be tempted by immediate gratifications like a delicious dessert or a hot investment trend.
Behavioral science tells us this happens because we lack a connection to the long-term consequences of our actions. Whether it’s the impact on our bottom lines or our waistlines, the consequences of our decisions today will be felt by “someone else” tomorrow
By making our goals as specific and detailed as possible – by separating them into buckets with timelines and dollar amounts, and priorities – we bring the future into tight focus.
Rick Barragan is the Managing Director,
Los Angeles Market Manager, for J.P. Morgan Private Bank.
[email protected] | (310) 860-3658
privatebank.jpmorgan.com/los-angeles
Source: “Make a plan today that even ‘future you’ will love”, by Amanda Lott, CFP, Head of Wealth Planning and Innovation, and Jeff Kreisler, Head of Behavioral Science, January 31, 2025.
