Planning for Uncertainty: Financial Strategies for the Future
Like it or not, we spend a lot of time making plans for our lives. Often, those plans change or just never happen. Some write their plans down on paper or inside an app, while others keep them all bottled up in their head.
The trouble starts when enough time passes, and your circumstances or priorities change. Life gets shaky and uncertain when your well-laid plans get forced to grow, stretch, or adapt. That’s why your financial plan should be flexible enough to grow with you and allow you to plan for the uncertainty and adapt to those changes.
When a plan breaks...
Without a little flexibility, a long term plan is often doomed from the start. Sure, we can make it a little ways down the road; we might even see some results. But when we get older, we may start wanting different things. Our lives and priorities may change, and then so must our plans change.
Our lives and our plans change. When the two take different paths, it can be easy to get stretched thin. When the future is uncertain, we may start stressing on the little things, and we might take our eyes off our goals.
If we're lucky enough to reach retirement this way, we might not like what we see. A stressful life and strained relationships probably weren't in the plan. But plans change, and now it doesn't matter. It's more likely that we won't make it that far. Without the right flexibility, we often give up.
When the plan breaks, when plans change, we might call ourselves stupid for even trying. We blame the plan that didn't work.
Growing Pains
The city of Indianapolis itself has had to adapt and change many times over the last 80 years. It hasn’t always been “according to plan.” Even a city’s plans change. When Chrysler and other large companies opened factories in the 1950's, Indianapolis had to plan and adapt to the surge of workers. Street markets and malls had to grow to keep up with demand. New city buildings and office spaces were a necessity. Small communities would become large suburban areas for the workers and their families.
Plans change and so did the population. Between 1950 and 1970, Indianapolis’s population nearly doubled. Within that short period, several new city landmarks were built. Landmarks such as the Indianapolis Zoo, the City and County Building, and the Indiana State Museum.
Imagine all the planning and action required to ensure these projects could be completed. The structure, services, and roads alone would mean more jobs. Which would lead to more investment and even more complications throughout the whole process.
Much of the cityscape has changed in the past 20 years. We’ve seen factories close due to outsourcing, lay-offs due to shutdowns or recessions, and a whole host of other events. Planners couldn’t have accounted for that.
Yet our city is still here, still standing, and still growing. Despite the fact that plans change.
Perhaps that means the planners of old did their job well. Maybe it was our ability to change and adapt over time. It’s possible we’ve simply been stubborn and lucky, but it’s more likely that we’ve seen a combination of the all three.
If the city planners had tried to account for every little change, they would likely still be planning today. Without the work done to the roads and city services, the factories couldn't have opened. Moreover, if they hadn't allowed for future changes and growth, the city may not have survived.
Simple and Flexible Planning When Plans Change
Ideally, the plan we want to have is both simple and flexible. Since we can’t see the future, it’s impossible to plan for everything. Yet, there are a few things we CAN do to plan ahead and protect our futures.
We can all probably agree that having a plan is better than not. It's important to know what you want, where you’re going, and how you’ll get there.
Without those key pieces, you might find yourself lost with no direction in mind. At the same time, a complex and detailed plan can be completely undone with enough time.
When you combine even the simplest plan with enough flexibility for change, it might give you peace of mind. That peace of mind comes from knowing you’re heading in a good direction. This kind of planning can possibly reassure us that the future isn’t a scary place and we can handle whatever time throws at us.
What are we waiting for?
When it comes time to plan out our finances, there are plenty of excuses we might use to get out of the deal.
The REASON we want out is that we don’t want to wait to spend that money. After all, isn’t that what a financial plan is – an agreement to save money and wait to spend it?
The truth is we’re always waiting for something. We’re always counting down the days until the weekend. We’ll take weeks to plan out and wait for a vacation. We’ll even put a whole wedding on hold so we can enjoy those beautiful fall colors.
Maybe we don’t always have the patience to sit down and make plans when the rewards don't come until much later. Perhaps you’ve already done your saving and waiting, and now you’re not sure what happens next.
Either way, if you're already waiting to spend money, please also consider waiting for a comfortable retirement.