The Planner's Perspective: Invest in Yourself

Paul Morrone |

By Paul Morrone CFP®, CPA/PFS, MSA

Looking back at the past 12 months, I bet most can easily think of something they did that was considered a ‘splurge.’ Maybe it was as subtle as an expensive dinner or as in-your-face as a new car, but we are all guilty of spending money frivolously in one way or another… and that’s a good thing! It keeps us happy, sane, and reminds us that hard-work is rewarded by getting to enjoy the finer things in life. Nothing makes me happier than when I talk to my client who bought a new car that they’ve always wanted or just got back from their dream vacation to Europe (or Asia, or Africa, or Disney World).

While financial planning involves many components at the detail level (cash flow, employee benefits analysis, risk management, retirement planning, estate planning, etc.), it’s the big picture that we spend the most time talking about. An analysis is performed behind the scenes to support our assumptions regarding accumulated assets, monthly cash flow, etc., but the focus of many of our discussions relate to the intangible items and what they mean to you, your family and your legacy.

For example, we may agree upon a sustainable retirement income of $XX,000 per month, but our dialogue will help paint a picture as to what this amount of cash flow looks like from a lifestyle perspective for both you and your family. A plan may help answer some of the questions that keep you up at night. Can you still splurge? Go on vacation? Give gifts to your children or charity? Leave a legacy for your family to enjoy after you are gone? At a higher level, what does your day-to-day life look like when you’re not spending 40 hours (probably more) a week at your day job? Our job as planners is not to try to cut down on your splurging, but to provide you with valuable insight as to how much you can splurge now without compromising your ability to enjoy your savings down the road.

What we aim to do is provide you with a roadmap to realize these dreams and enjoy the occasional splurge while staying on track to reach your long-term financial goals. This may be in the form of deferred gratification, meaning saving more now to increase your chances of having more assets available in retirement. It may mean establishing savings benchmarks to realize a lifelong dream, maybe a second home in the south, a large family vacation or establishing a legacy to benefit your favorite charity. There is no uniform approach to managing your financial future, but a good place to start is figuring out where you are today. What does your lifestyle look like? Your spending habits? What is important to you? How is your work/life balance?

We also understand that there is a cost to setting up a financial plan. There’s an investment of time, money and energy that go into creating a tailored plan and for some this barrier alone is enough to dissuade them from engaging in the process. Younger folks may think that it’s not worth thinking about now as they will be working for decades more. Older folks may feel that they don’t have enough time to make up lost ground. On top of that, navigating the complexities of insurance, investments, taxes and regulations is enough to make one’s head spin. These factors aside, it is never too late to set up a plan. An investment in yourself is one that is hard to put a price on, as many of the tangible benefits will not be realized for years or even decades in the future. The instant gratification comes solely in the form of information and advice, understanding where you’re currently at and what you need to do get to where you want to be.