As this year draws to a close, I feel a natural inclination to reflect. How has it been going? What went well? What not so well? How did I handle the challenges that my life and my business presented to me over the past year? I comb through some of the key moments, successes and failures, highs and lows and contemplate where I had resilience and where I need to build more.
In my financial planning practice, I ask similar questions about each of my clients experiences this year. How closely did real life follow the plan? In a few cases, things have hummed along, tracking merrily with the plans we have built. More often, however, curveballs arrived. I think it is key not to fear the curveballs, because they will come anyway. It is how we build resilience that will help us meet life’s challenges with grace.
Many of life’s transitions have strong financial implications. Birth, death, marriage, divorce, illness, injury, job changes, location changes, so many opportunities for both excitement and uncertainty. Resilience is the ability to meet these moments with fortitude and to have tools in the toolkit to navigate change. This is true in both the financial and personal aspects of our lives. In personal life it is about building and maintaining healthy relationships, communities and support networks. In financial life it means doing the planning work, focusing on first the foundation and then the complexities that will serve to build, grow and protect the resources meant to support ourselves and loved ones over time.
At the foundational level, financial planning includes understanding your own cash flow, creating an emergency fund, managing debt wisely, saving for future goals and ensuring adequate protection with insurance and estate planning. As lives and finances become more complex, fresh nuance comes to play. Tax and investment management, college, retirement, long term care and legacy planning are all parts of the comprehensive financial planning process. Over time, as things inevitably change and surprises begin to arrive, our planning may be tested. Resources may need reallocation, the plan gives way to new planning, and we build our resilience.
