Don’t forget. Planning your finances is also about enjoying life
I met up with some friends a while ago and was shown their kitchen calendar while refilling my glass.
Each month they’ve marked the time left until they retire.
The countdown (it’s currently sitting at around 40 months to go) is a tangible reminder of their big financial plan. It’s an event worth celebrating when they reach the end of the month and turn over to see that number getting smaller and smaller. It’s a plan worth sharing with friends and a commitment to themselves.
Retirement, or shall we just call it the future, is also a major topic of conversation in their circle of friends as careers are maturing and children are leaving home: what they plan to do, when they want to finish working. And, the big question, can they afford to do it earlier than once thought?
Their experience is actually a pretty common one among the people who come to see me for advice.
But, at the other end of the spectrum, there’s another group in a different position altogether.
They tend to be about 20 years older, well into their retirement, and are starting to worry they have more money than time to spend it. One of my clients was told when he was 55 by another adviser that he wouldn’t have enough money to retire on. Now, he and his wife are asking how they can give it away.
A big change of mindset
It’s no surprise really that if you’ve been saving every penny for retirement, it doesn’t exactly feel natural to suddenly change tack and start spending, especially with all that uncertainty ahead, I mean, you know, what if…?
Many of us have conditioned ourselves to hold back on certain things, thinking ‘not yet’. Once you reach the moment though, it’s hard to change your mindset.
That’s why the message of this blog post is… plan ahead – but also live a little.
We’ve only got 4,000 weeks
If you break down the average lifespan, it’s about 4,000 weeks – give or take. And when you put it like that, it doesn’t seem that long at all. You can’t afford to not at least enjoy some of it. I’ll be 55 in the New Year, so I’m already 2,839 weeks into my 4,000. Eek!
That’s the central premise behind Four Thousand Weeks: Time and How to Use It by Oliver Burkeman, and it’s got some interesting lessons on making good use of what we have.
He says: “Your experience of being alive consists of nothing other than the sum of everything to which you pay attention”.
We have to accept we will never get everything done. You can (and should) make plans, but you also have to be careful not to obsess so much over the plan that you fail to enjoy the journey that got you there.
Focus on the right parts
Sometimes a means to an end is good – good grades will get you into university. But what then?
A friend of mine’s daughter is embarking upon her Duke of Edinburgh Silver Award. It’s a great scheme that opens the door to new experiences and opportunities. Of course, it also looks great on a personal statement or CV.
But focus too much on that second part, while ignoring the first, means your overall experience will be the worse for it.
Put it another way, if you’re a parent, and devote your life to bringing up your child to be a model adult, it’s very easy to forget to enjoy the experience along the way – and what a waste of 18+ years that would be.
Why plans are still important
In a previous post, I wrote about making plans even though you know it will go out of date as soon as it’s created.
There’s probably a million ways the future could end up being different to what you thought. That’s why I don’t really see a benefit to setting an arbitrary figure, such as “I need to have £1 million by the time I retire.”
But the opposite, telling yourself it doesn’t matter, is also counter-productive. No goal to strive for means your retirement fund is more than likely to come up short. The ‘life is short’ isn’t an excuse to just blow it all.
Just remember that, in the 4,000 or so weeks we’ve got, we need to pay attention to the parts that matter most to us, and plan to enjoy both the experience of working towards retirement and reap the benefits when we get there too.
Remember how John Lennon put it: “Life is what happens to you while you're busy making other plans”.