Financial Planning Week 2010 is almost upon us. This Week – from 22-28 November – plays a significant part in the Institute of Financial Planning’s endeavours to educate the wider world on the benefits of a proper financial plan.

It is an uphill battle all the way – as last year’s IFP research showed, more than one in four Brits are pinning their hopes of improving their financial situation on winning the lottery.

But why are people still so reluctant to embrace the concept of financial planning? Even those who do seek advice still tend to think in terms of products rather than about the goals that they want their plan to help them to achieve.

My own experience with a wide variety of clients is that fear is the main barrier to change, followed closely by a degree of chagrin that people feel that they are not managing their financial lives properly.

For some people, this fear is based on the fact that they are thrown into a situation, through death or divorce, where they have to take on the challenge of the family finances having previously been sheltered from dealing with them by their partner.

These people can be utterly terrified by money and unable to even begin to make a start on dealing with the nitty-gritty, which can include estate planning and inheritance tax issues as well as day-to-day income and expenditure. Yet a financial plan, and the process of making one, can help them to understand not only the actual figures, finances and products, but also how to deal with their own concerns about handling money.

Other people may fail to recognise how integral money is to the way they live their lives and, in broad terms, this is symptomatic of their unwillingness or inability to face up to the emotional implications of money.

There is reluctance to take even the first step of working out a household budget and a spending plan for the future, partly because it takes time to do but largely because of the fear of what going through the process will reveal.

Money is so integral to life that this process makes people face up to the way they live their lives. For some this reveals little shocks – do they really spend that much on wine ever month? – but for others it is much more painful because it brings home the fact that their life is not really the life they want to live.

There is the fear of not facing the truth of the way we are spending money today. Most people are instinctively aware that, even if they are not spending too much, then they are probably not saving enough for the future.

There is also the fear of having to face the consequences of overspending, of not saving for the future and of not taking responsibility for the longer term.

All these fear factors can cause stress. What I have found is that going through a proper financial planning process, which is not about products, but looking at your life goals, your current budgets and future spending plans, means you can achieve an understanding of your financial situation which most people do not have.

Just going through the process can be deeply liberating and provide the most amazing sense of freedom. Even if things are bad, then there is still a strong element of relief there because you are taking the first steps to deal with it. You lose the fear of money because you have an understanding of it and its part in your life. Once you reach this stage, money ceases to be a painful issue and becomes something you can work with in a way that will lead to your deepest goals being achieved.

In an earlier article we talked about how to establish your core fundamental life goals. That, in itself, is an energising exercise because having a clear idea of where you are going can certainly bring energy and vitality to your life. The next stage is where the “rubber hits the road” so let’s discuss how we start turning that emotional energy into practical energy and physically doing things to achieve our goals.