Paycheck Chronicles

Are You Thinking Long-Range?


I listen to a few financial podcasts, and my all-time favorite is called Big Picture Retirement. The hosts, Devin and John, are smart and funny. In this week's episode, John says something that really smart: “Never, ever, ever, ever plan for what the circumstances are today, and


never plan for what you hope continues...You plan for the exact opposite of that.”  

It’s a brilliant concept, and it applies to pretty much everything in life. The more forward-oriented your planning, the greater the chances that you’ll end up with results that fit your future. And if you plan for the worst, you’ll be in great shape if bad stuff happens or not. Here’s a super-simple example of the first part of this idea: My husband and I always thought we’d have three or four kids. Four was definitely an option, even when we discussed these things before we got married. When I was expecting our first child, we needed to purchase a new (to us) vehicle. We bought a mid-sized station wagon, imagining that was huge for a family that was about to be three. Fast forward four years, and I’m car shopping again because we’re expecting our fourth child and that huge station wagon wasn’t going to be big enough. Neither were brilliant car purchases, because I’m not completely rational when greatly pregnant, so this lack of foresight cost us a lot of money. What if you applied these two tests to all your financial decisions? What if you decided your monthly spending plan based upon what you wanted your life to look like in 10 or 20 years, even if a lot of things went wrong between now and then? You might choose to do many things differently now, such as upping the coverage on your car insurance, putting more money into your retirement accounts, buying that life insurance you’ve been avoiding, choosing a more affordable house, and stop accruing debt. And your long-term results would certainly be different, almost definitely in a positive way. When you’re planning your finances, think about the future implications of the decisions you make today, then think how you can disaster-proof the outcomes you desire. Framing your choices around those two questions could have some pretty dramatic results.

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