For several years, I’ve had the opportunity each fall to attend an architecture conference in Jackson Hole, Wyoming, and learn about that industry. The opening session this year was about wellness, specifically how to “build well to live well.” While the presenters were talking about constructing “well” buildings, I found that the topic held many parallels to managing personal finances.
Conference attendees identified and discussed some of the issues and roadblocks they faced in getting owners to consider wellness when building an office, hospital or home. While everyone will agree to the virtues of designing and erecting a “well” building, certain obstacles can prevent that from actually happening.
Lack of a vision, lack of education, arbitrary time constraints, failure to include all the stakeholders in the appropriate decisions and inadequate budgets are all potential problems. In short, not having a proper, comprehensive plan and not starting soon enough can derail even the best ideas and intentions.
Unless luck is on your side (and who wants to rely on that), everyone needs a blueprint for their personal finances. Like in construction, a financial blueprint starts with a vision of what you want to achieve. It can be difficult, however, to look far down the road instead of focusing solely on this week’s pressing life issues. But getting beyond today and envisioning how you want your life to look in the future is key.
Once you have your vision and your top goals defined, you can put details to the plan. The blueprint to a new home starts with the overall layout but ultimately gets down to the smallest particulars, even to the level of determining where each electrical outlet will be placed. Without the grand plan and all the details laid out, the final product likely will not turn out as envisioned.
Of course, there will be “on-the-job-site” changes as things evolve. What looked perfect on paper may not feel right once the walls are up and you have more clarity. The same is true for your financial plan. What you thought was a perfect plan for retirement at 30 may change as life evolves and you gain wisdom and wider experience.
Including all relevant family members in your planning process is important. For instance, planning for retirement will need to be a joint project between you and your spouse. If you want to move to a remote cabin and spend all your time reading and fishing but your spouse dreams of moving to New York City for the sophisticated urban culture, your joint retirement plan will need some work. As another example, being properly prepared for your child’s educational expenses will depend greatly on whether that child has always wanted to be a doctor or, alternatively, has no desire to go to college.
Having time on your side to save and invest to meet your goals and complete your vision is critical. Success often requires you to start planning, and begin executing that plan, many years in advance. Waking up at 60 and starting to plan for retirement at 65 can be a recipe for failure. Knowing what you need to do and when, early in life, will help you achieve your goals and dreams.
Be the architect of your personal finances and draft your blueprint. Start with your grand vision for your future, and then begin working out the details of how you will build it.