How about we plan your retirement? Let’s see if I can set you up in a nice second home by the beach; we’ll schedule in an inheritance for the grandkids with some tax planning. What’s that? You’re only 34? Not a problem. According to my planning software, this is going to be a breeze.
Sure, there could be a few bumps in the road. Hypothetically speaking, you might lose or change your job at some point over the next 35 years. It’s possible that your income won’t increase at precisely 3% per year over that time. And of course, if you end up with chronic medical problems, extra housing needs, a relative in need of long term care, two extra kids, a new business, an unexpected windfall… Well, that’s just an implementation problem on your part.
I love planning software, financial or otherwise. There is nothing more satisfying than the moment when its perfectly formatted, mathematically elegant rows sweep away all my uncertainties to reveal the future in an aesthetically pleasing sans serif font. Serifs are for spendthrifts, you know.
Of course, the math is in my financially planning software is perfectly correct. It provides all sorts of helpful data. Did you know, for instance, that by just investing the $7 a day you spend on frozen coffee drinks…you may still make very little headway on your retirement needs? Maybe you should just enjoy the coffee. Back to my point.
The mathematics in projections is quite real, but that does not mean that the reality it purports to show us is equally realistic. What planning technology actually gives us is nothing more or less than a clear mental space in which to confront uncertainty. If planning is to do us any good at all, the perfect order of a projection must to give way to much more messy, disordered discussions. Are you afraid your partner won’t get the job he wants? Do you really want more time with your kids? Do you want to live in this town forever? Who is going to step in when mom’s dementia gets worse?
Our feelings about money are tightly intertwined with the sense of control we have (or don’t have) over our places in the world. When we feel great, we don’t worry too much about the money. When we fear losing control, finances become a tangled, shadowy threat we anxiously avoid. Most people think my job as a finance professional is to keep track of the latest news on technology stocks and bond yields. To a limited extent, they are right. But my more important job is this: to invite you into the carefully ordered space of my office where, amongst the carefully ordered rows and buttons of my fancy software, we assign each shadowy tangle in your mind a name and a place. We come up with strategies and back up plans. And we fuss over those until you can look at the pretty projection with which we started, know its weaknesses, and feel assured that you can deal with those if and when they appear on your doorstep.
The bad news is that no amount of planning, financial or otherwise, will reduce your life to a tasteful minimalist web page with a properly calculated ending. But that’s also the good news. Be flexible with your plan; cling tightly to your strategies. And if one of those strategies involves a $7 mocha latte, that’s probably ok, too.