When Planning for your Future, consider the Irrational

Guest Post from Sharon Gilmour-Glover, COO of http://Light-Core.com/
"When Planning for your Future, be Sure to Consider the Irrational."

I was talking with my mother-in-law the other day. Her good friend had just moved into a retirement/long-term care facility. My mother-in-law was stunned by how quickly her friend went downhill.

Just a few month’s previous they had still been enjoying going out for lunch, going to the theatre, shopping together and then suddenly, Peggy just seemed to fall apart. Every single decision was too much for her, she was afraid to drive anymore and finally, Peggy needed to move into supported living.

Pic_ anxious senior womanPoor Peggy was so stressed and upset about moving from her home of over 50 years and on top of all of that, she was terrified about money because she didn’t have enough. She knew she was going to run out. The place she was moving too was so expensive and she couldn’t possibly afford it. What, she asked my mother-in-law in tears, was she going to do when her money ran out?

This sounds like a pretty typical story. Husband dies first after needing care for more years than they had anticipated. All of a sudden wife needs unanticipated care and there’s not enough money.

Except there is; Peggy actually has more money than she can actually spend in her remaining years, even if she lives for another 30 years, which seems unlikely given she’s nearly 80.

In actual fact and from a rational perspective, Peggy can well afford the advanced care she needs. That however is not Peggy’s emotional reality. Peggy’s experience is that she doesn’t have enough. She is living through sleepless nights and significantly elevated levels of stress because her reality is that she doesn’t have enough money.

While Peggy’s health has declined significantly and rapidly, let me be clear; Peggy doesn’t have any form of dementia. What Peggy has is deep-seated fears about lack of money. Peggy’s real issue is irrational, not rational.

It is very, very easy to fall into the trap of thinking that financial planning is, for the most part, a rational exercise. Of course it’s critically important to work with a professional that is certified and current. When planning for your future, that’s not nearly enough. That is merely the cost of entry.

There are few things more charged with emotion than money. Just think about the stories you’ve heard about people fighting over estates when parents have passed away. And I don’t mean gargantuan estates worth katrillions of dollars. I know 2 sisters who fought over a hanging basket of plastic fruit after their mother passed away. Seriously!  Clearly, the fight was not about the plastic fruit. It was about something much, much deeper.

Fear of not having enough money and its flip side, guilt about having too much money, are completely irrational, deeply emotional issues that must be considered and worked with when doing any kind of financial planning.

We’re living longer. We need to plan for a retirement and old age that is as long or perhaps, longer than our working lives. That, in itself is daunting. When you start to think seriously about your future, including succession planning if you own a business, don’t fall into the trap of thinking you can push the emotions to the side and “just be rational” about the process.

Be proactive and talk about your fears and guilt about money. Spend time reflecting on what you learned about money from your parents. I don’t just mean the conscious lessons you learned. I really mean the unconscious lessons you learned just by living with them, think Rich Dad, Poor Dad.

Most importantly of all, find a professional who, as well as being certified and current, is aligned with your values and life purpose. Find someone who is proactive and helps you to explore your beliefs and emotions around money. Find someone who will help you consider the irrational aspect of financial planning (and life).

None of us knows what the future holds but here’s something we can count on. We’re going to get old. We’re going to become less confident and we’re going to feel more vulnerable. That is not the time to be driven by the fear of running out of money, especially when, from a rational perspective, there is plenty of money available.

Pic __ Sharon GilmourThe author, Sharon Gilmour-Glover, is the COO of Light-Core, a business performance improvement firm that specialises in helping people and businesses learn how to harness the enormous opportunity in barriers and challenges to create sustained, profitable growth. 

 

2 comments

  1. Hi Brian,

    Thanks so much for giving me the opportunity to share this story and perspective on your blog.

    One of the things I’ve always admired about you and the way you work is the time you invest to really understand what matters most to people, the values that drive them, the vision of the future that matters most and what they most fear. And then you help them put together the plan and solutions that will deliver on those needs.

    Whether business planning, financial planning or any kind of planning, taking time to uncover the whole picture is so important.

    Cheers,
    Sharon

    • Thank you Sharon for vivid insights and Peggy’s story that help us know we can live Beyond our Irrational Fears. We now can also share this resource to help parents & friends overcome where they’ve been stuck due to worries / uncertainties like Peggy.

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