My Comments: It really helps to sometimes see life from 50,000 feet. This article does that for me.
We get caught up in the crisis of the moment, which happens all the time. And depending on our age, we focus on what we need to do today.
My focus is helping people create a worry free and financially secure retirement. But that implies something that for many people is years away, and there simply isn’t enough incentive to start thinking about it TODAY…
My challenge to you is to find a way to start nibbling at what will become a serious problem for you if you don’t do something. The years will roll around, and you discover to your horror that you simply don’t have enough money to enjoy life the way you want to.
by Ryan Fralich \ November 1, 2018 \ Forbes
You’ll never get “there” when it comes to managing your financial life. You can’t get “there” any more than you can get “there” with the pile of laundry in your hamper. It’s never, ever done. It can’t be. Just as soon as you get one piece figured out, something new will reveal itself.
When you graduate college, you’re just trying to get a handle on having a real salary. How do I handle my cashflow? What do these benefits at work even mean? I know my student loans will come due in six months, so what’s my plan for that?
Then, after a few years, you’ve got an emergency fund of $5,000 and your student loans under control, and you’ve gotten a raise, so you have a little bit of extra cash each month. What do you do with it?
And, after a few more years, you get married and merge finances. Just when you’ve gotten used to handling finances as a couple, you buy a house.
And as soon as you buy a house, you start learning how to be a homeowner and plan for all the expected (and unexpected) expenses that go with it.
And once you’ve got the house down, a baby enters the picture. Now your budget adjusts in a myriad of ways, with daycare, diapers, health insurance, baby food and trying to figure out how much, or whether, you should be saving for their college education.
And once you’ve got a new budget in place, you’re figuring out life insurance and estate plans, vital pieces of any parents financial plan.
And not long after you’ve settled into a groove, a new baby joins the picture, changing everything once more.
And while all this is happening, you’ve changed jobs (twice?) and have a new salary and benefits to navigate.
And then, the daycare expenses subside. You find yourself with several thousand dollars per month in cashflow freed up, and needing to figure out how best to use it.
And you realize you’re almost forty, and need to see if that money you’ve been tossing in a retirement account for years has you on track to stop working someday.
And then your kids are teenagers and looking at colleges. Maybe you’ve saved for it already, or maybe you’re just starting to put together a plan for that.
And suddenly you’re empty-nesters in your 50’s, and those AARP commercials don’t seem so foreign anymore. Topics like long term care insurance, medicare, and social security strategies suddenly seem worth reading up on.
And then you meet with your advisor and they tell you, due to all your work over the decades, you can choose to retire at 63 if you want to.
And you retire at 63, but not before having figured out how you’ll bridge the gap to medicare coverage.
And navigating medicare? Part A, B, C, D, each with their own rules more convoluted than the last. You could spend half your newfound free time learning about that.
And you look up, and somehow, someway, that child of yours has a child. And you decide it’s time to update your budget for some additional travel plans, open a 529 for the grand baby, and update that estate plan you made so many years ago.
And then you’re 70 and noticing that investment account balance is about 5% less than when you retired 7 years before. You’re used to decades of a generally upward trend, and the stagnation makes you uncomfortable, no matter how many hours you spend reading about safe withdrawal ratios. You want to ensure your nest egg will last long enough to make sure you’re never a burden to your kids.
And on it goes, probably with another couple dozen major financial curve balls along the way. The stressors will change, but managing your personal finances won’t ever go away. Once you let go of the idea that getting good with money has a destination point, you’re able to see and appreciate the tremendous progress all those tiny changes over your lifetime add up to.
Stop worrying about ever “getting there” and enjoy the journey.
Ryan Frailich is a Certified Financial Planner™ and founder of Deliberate Finances, a financial planning firm working with young people in New Orleans and across the country.