From Here to the Future | Directions?
- Dev Team
- 19 Nov 2014
I think the days are gone when people can make jokes about why men don’t ask for directions. The truth is, almost everyone has a maps app on their phone, GPS in their car, or access to the mobile internet – and we have become accustomed to using these tools. It’s completely common to just look up directions on our phones when we are trying to get somewhere we’ve never been before. The funny thing is, our lives operate under exactly the same concept. Yet most people don’t stop to ask for directions especially when it comes to managing their money.
Imagine this: you pull out your smartphone and type in a destination into the maps app. You then drop a couple pins in place to mark some stops you need to make along the way. Then you hit the “current location” button for the point of origin. In an instant you’re provided with a couple options of how to get where you want to go.
Now, imagine that the destination you’ve entered is your lifestyle once you’ve retired (Not only your age when you retire, but also how you want to live once you’ve stopped working for a paycheque). Let’s say that the “pins” you’ve dropped are key events in your life between now and retirement; maybe it’s the kids going to university, maybe it’s starting your own business, maybe buying a house… you get the idea. Your “current location” is exactly that, where you are today.
If I were to do the same exercise, my destination, stops along the way, and current location would all be different than yours. So, if my destination is different than yours, and my current location is different than yours, why would our directions be the same? Of course our road maps would be different. So, our directions for managing our money should be different too!
This is why you need a plan. The truth is, your life is yours. No one else (aside from your spouse/partner) gets to determine your desired destination, or the stops you make along the way. No one else has the exact same starting location you have. Why would you accept someone else’s directions to navigate your life? Making a plan for your finances is more important than money—it’s about life.
We all know that nothing in life goes exactly to plan. Life is fluid, we all experience major changes as years go by (marriage, divorce, kids, inheritances, career changes), and for most of us, even our desired destinations change along the journey. This is why you need to revisit your plan at least once a year.
A good financial plan helps provide the roadmap to get you where you want to go; a great financial plan also helps protect you against the unplanned detours along the way. Whether it is a job loss, a disability or a severe health issue, navigating the tough times is where your complete plan becomes invaluable.
A complete financial plan encompasses looking at everything from your income taxes, to managing debt, interest rates, inflation, pensions, monitoring changing legislation, markets, managing risk, and estate planning. Sound a bit complicated? If you try and tackle this on your own, it can be incredibly daunting. This is why getting some outside advice is so important.
Ok, I need a plan. How do I get one?
The best place to start when trying to make a plan is to get some help from a professional you trust. Some institutions charge a fee to develop a full written plan; others work with you to prepare a plan free of charge. No matter where you are in your life, the best thing you can do is to check your current trajectory. Take the time to sit with someone and look at your plan, or if you don’t have one, start one. But just like you wouldn’t just take a guess on directions when taking a long road trip, don’t leave this to chance and don’t take someone else’s directions. Your destination is your own; your road map needs to be yours too.
As always I’ll say the best advice is to get some advice, and if you have any specific questions you can always send me an email. Also if there are specific topics you would like to read about in future issues, please drop me a line and let me know.
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