You can move from scarcity to generosity
Am I going to be OK?” Whether stated in those words or otherwise implied, this is the question our group has heard most frequently from our clients during the past 18 months. Recession fears are still reverberating throughout their lives.
Among the many activities and events that can be financially unsettling, planning for retirement can be especially stressful. A generation ago, “the company” took care of retirees in the form of pension programs and health care plans. Today, we now have a generation retiring with neither of these things, but instead with lump sums in 401(k), 403(b), and IRAs. Strategy decisions that used to be discussed in pension departments are now implemented at the kitchen table. A poor decision can diminish — if not devastate — one’s future financial security.
If worries about big issues like the economy, job security, and retirement finances aren’t sufficiently troubling, we are also bombarded daily by thousands of media messages telling us we need more, bigger, better, and newer “stuff.” The entire experience leaves us feeling financially inadequate. How can we find security in this ever-changing mix of pressures?
Now is the perfect moment to step back and consider what’s really meaningful in our lives. Financial planning can provide a format for important conversations to help think through these things.
Adding and subtracting to get to a current balance isn’t as important as actually understanding how money is spent.
A thorough inventory of personal values and goals, laid beside current expenses, gives good perspective as to whether your money is serving the things you most value, like faith and family, or material, temporary things, like big screen TVs.
It is essential to understand where you spend your money. In the era of online banking and electronic bill payments, the process of balancing one’s checkbook has become a lost art. Adding and subtracting to get to a current balance isn’t as important as actually understanding how money is spent. How much do you spend eating out every month? On dry cleaning? DVD rentals? Once you understand how you actually spend money, you have a place to start.
Looking into the future is the next step. From the perspective of your values and what you believe is really important, what do you want to have happen? Are you on the path to making that happen?
Answering that question gets at the “Am I going to be OK?” concern. A few changes might be needed. Or maybe, rather than falling short of your goals, there’s more than enough. Either way, now you have a plan, and that by itself helps address the underlying unease.
The process above helps you move across a continuum from scarcity (“I’m afraid I’m not going to make it.”) to sufficiency (“There’s going to be enough!”) to, eventually, generosity (“There’s more than enough, and I’m called to share it!”).
Said differently, financial planning can help create a financial permission slip to give to the people and causes that are in your heart.
Leaving a bequest in your will, trust, or by beneficiary designation can help assure that the churches and institutions are also “going to be OK” into the next generation. That benefits both the donor and the recipient.
In the last 18 months, we’ve been through a period marked by a tone of scarcity. Through thoughtful planning, we can see through the scarcity. We can see a way in which we are going to be okay. And we can live and share generously.
Bruce Ensrud, CFP, ChFC, CLU, FIC, is a senior financial consultant with the Colonnade Group of Thrivent Financial for Lutherans in Golden Valley, Minnesota. He can be reached at 952/475-9700.