Don't Drift Through Your Financial Life - Make A Plan

Year-end is my time for reflection and renewal. Business owners use it to set goals and develop a plan with benchmarks for the next year. I started applying this perspective to my personal life.

The end of last year was hectic, with my knee replacement in November and my mother-in-law’s death at Christmas. I didn’t take the time to center myself before 2019 began and I have felt behind all year. I’m not a fan of new year’s resolutions, but I am a big fan of examining my life and what’s working and what could be improved. Here are some of the areas I have explored in the past.

◗ Big-picture planning

Envision the life you want. Are there ways to include bits of it in your current routine? I always envisioned a small, home-based practice. While this is not a practical option for me, I have created a home office and am starting to use it more.

My husband was offered an early retirement package this fall that he declined. We were talking about his choice this week and his big reason for continuing to work was that he didn’t know what his life purpose would be once he left the workforce. He has lots of things he wants to do around the property, but that wasn’t compelling enough. His goal for the next year will be to identify what will give his life meaning once he is no longer employed.

◗ Financial housekeeping

One of the key findings in Wes Moss’ book “You Can Retire Sooner Than You Think” was that “happy retirees spend at least five hours a year planning for retirement.” Jason Butler in the 2017 article “Are you a financial ostrich, engineer or pragmatist?” stated that “the ostrich approach—aimlessly going through life without any sense of what you need to earn, save and invest—increases the probability of you either having to work until you drop or spend your old age in poverty.” A small investment of time will yield huge dividends in retirement.

◗ Money messages or scripts

“Are the voices in your head calling, Gloria?” is a line from Laura Branigan’s 1982 hit song, “Gloria.” At least it was a hit with me. Have you ever paid attention to the money voices in your head? What did you learn growing up? Here are some common messages: “Money can’t buy me love.” “Money doesn’t grow on trees.” “Do you think I’m made of money?” “Money is evil.” “Rich people are greedy.” Once you can identify your money scripts, you can take steps to overcome them.

◗ Family meetings

I recognize that my family dynamics are unique. We talk regularly about family finances and goals.

We talk about everything from our final wishes to where we want to go on vacation this year. We talk about college expenses and the trade-offs we make for the boys to go to college. We talk about how we even things out because one education will cost more than the other. Can we afford a car this year or next? What home improvement projects are on the horizon?

My husband and I have really started talking about travel. What are our dream trips and which ones are priorities? What trips can we take before retirement and which ones should wait? We talk about how blessed we are to have choices. We talk about our values and how we use money to support those values.

A small investment of time now will increase the likelihood that you will have a more enjoyable retirement. Most of us drift through life, taking the path of least resistance. I hope you will carve out time to make financial and life planning a priority in 2020.