Why should you do financial planning right now? Um, maybe you shouldn’t.
Sometimes when in a sales situation, the seller creates urgency – there’s a deadline to get a certain deal. I HATE this. Deadlines and deals are artificial. You should never feel like you’re making a decision under a deadline, and if you do, it might not be the best decision you’ve ever made.
I’m going to make a bold statement: I kind of dread it when people come to me for financial planning when the reason they are moving forward is because they feel like they have to make a major financial decision RIGHT NOW. True, I find that most people look for some level of financial planning when a major life event is about to happen, such as:
- Moving in together
- Getting married
- Buying a house
- Having a baby
- Major promotion
- Paying off debt
- Kids starting primary school (and you don’t have to pay for daycare anymore, woohoo!)
- Kids starting college
But financial planning – and most major life decisions – shouldn’t be rushed.
Instead, I like to think of financial planning philosophically: regardless of where you’re at in your life, you’re trying to make the best use of every dollar that comes in and goes out of your household. That just means knowing that you’re saving enough, and in the right places.
For a lot of people, financial planning isn’t about making a drastic change, it’s about gaining more clarity and getting on the same page with the other people in your family (or getting on the same page with yourself). It’s about shifting gears (maybe a little, maybe a lot) so you don’t get too far down the road before realizing you might need to course correct.
Financial planning is giving yourself permission
Most people think financial planning is about NOT doing something — not spending as much, mostly — but it’s really about permission. Permission to have a vision. Too often, people are so scared of their financial lives, they just ignore it and hope it works itself out.
What’s the difference between “saving for retirement” versus “right now, I am putting away as much money as possible so that I can quit my day job and go run an online business from a hammock in Bali”? Now, right there, all of you probably started to modify that picture I just painted…Hammock? Bali? No, I’d open a handmade store on Etsy and stay right here in Seattle — or whatever. The point is, something gets you excited, and that something most likely needs you to arrange your money to support it, right? And how do you know if you’re getting what you need from your money unless you can see your money paving the way for your specific, awesome future vision for yourself?
My hope for people is that financial planning is never urgent in the sense that you’re under a crunch to make a good decision about something. Instead, I hope for urgency to get what you want from life. I hope for urgency around your awesome, unique vision of the future. And I know the way you get there is more consistent attention, more clarity and discussions, so when the big decisions come up, you know what to do.
And if you want some help with that – always happy to chat about it with you.
