To combat this, I've come up with an exercise to help illustrate the point. The Resource Circle exercise provides a tool to help people understand that one decision impacts many other decisions. The Resource Circle exercise is very simple. You can try it yourself by printing the attached worksheet and following the instructions.
Using The Resource Circle worksheet, I ask people to write down their goals and objectives inside the circle. A goal of greater importance should be drawn larger and with a heavier hand. Objectives of smaller importance should be represented with smaller writing. The goals and objectives should include tangible items such as a new car and a retirement goal, but also intangibles such as lower comfort with risk and strong desire for tax avoidance.After including only a few important goals written large, space quickly runs out. And that's the point. Resources are limited, and even unrelated goals draw from the same pool of same resources. Pursuing one goal leaves less time or energy or money to pursue another goal. Goals can continually be added, but they need to be squeezed into ever shrinking spaces in the circle.
The exercise can lead to a variety of discussions with clients. A planner can help a client identify goals and objectives that didn't make it into the circle, but have been discussed in the past. Completing the exercise can lead to a discussion about prioritizing certain goals over others. An important, but sometimes overlooked, conversation that may result is how to increase the pool of resources.Improved decision-making requires a clear understanding that each decision impacts other decisions. The Resource Circle is an exercise that can help make this point clear. There's no magic here, simply a tool to illustrate one element in the decision-making process.
I love an exercise that can help drive a conversation with clients around making good decisions. I think The Resource Circle accomplishes this in a very understandable way.