In mainstream financial planning, all roads lead to one ultimate destination: retirement.
The word retirement invokes a picture of a gray-haired couple relaxing on the beach or (even worse) on rocking chairs on the front porch.
Indeed, if you look at the websites of financial planners who work with those approaching or already in retirement, you’ll likely see those exact pictures: gray-haired couples… relaxing in striped beach chairs by the ocean.
I love the beach, and I definitely don’t plan to work until the day I die. Setting up your future self so that you don’t have to work until you die is an important—even essential—piece of your financial plan.
I just think that we need to focus on living a balanced life that sets us up for future success while ensuring that we also use our financial resources to optimize and enjoy our lives right now.
Are You Waiting for Retirement to Enjoy Life?
In our society, retirement marks the end of work and a period of time typically thought to be filled with relaxation, hobbies, and spending more time with family.
However, consider the following:
- When in your life do you need to incorporate rest and relaxation the most due to high stress-levels?
- At what stage of life is spending time on your hobbies the most needed to recharge your batteries?
- At what point in life is spending as much time with your family as possible the most important?
For me, the answer to all these questions is not when I’m in my 60s, 70s, 80s or beyond. It’s right now while in the middle of parenting teenagers. It was when I had little kids, and they needed what seemed like infinite time and energy from me.
In addition, some life experiences simply may not even be possible if you wait until later. Your kids will only be little once, and there’s no way to know how healthy you will be in the future or even how much time you have left.
There are so many beautiful and amazing things in the world – places to go, things to see, experiences that will improve your life – that you will miss or not fully enjoy if you don’t intentionally prioritize them now.
Time, Health & Money: Finite Resources
In Die With Zero, one of my favorite personal finance books, Bill Perkins discusses three significant influences on our ability to experience life: health, free time, and money.
Rarely do we have an abundance of health, free time, and money—all at the same time.
The typical person goes from college to a full-time job and family life and then is busy in their career with various advancements and ever-increasing responsibilities. When we’re young, we have time but very little money. When at the peak of our careers, we have money but very little time.
This graph from the book shows how some of these factors might intersect during stages of our lives:
Health is often the most significant factor. There are things that we have the ability to do in our 20s, 30s, or 40s that most people simply won’t have the physical ability to do later in life.
If we allow our lives to pass by on autopilot or, just as bad, if we focus too much on planning for the future, we may miss out on opportunities to experience our most fulfilling and rewarding lives.
How Can We Better Maximize Our Lives?
Every time you spend money, you show your priorities. You are choosing something you want now over something you will want later. After all, money is a finite resource (although not nearly as finite as time).
As long as your spending aligns with your values, there’s nothing wrong with this. Unfortunately, too many people simply don’t put that much thought and intention into their values and life goals, let alone their spending.
The solution is to be more intentional about what’s most important to you, how you want to live, and align your financial resources accordingly.
These questions can help you think about how you can better maximize your time, health and money:
- What do you really want to do but haven’t because of lack of time?
- What do you really want to do but haven’t due to financial reasons?
- What do you really want to do but haven’t due to health reasons?
- If you could reduce your working hours, how would that improve your life?
- If you look through your spending, does it align with your values?
- Are there trade-offs you could make to free up money for things that are either more important to you right now or that you will completely miss out on if you don’t prioritize them soon?
Perhaps there are things that come to mind that you’ve been wanting to do, but just haven’t prioritized. Maybe there are things that you’ve already missed out on that you may not be able to do in the future simply due to different seasons of life.
Here are a few fun ideas to help get you thinking (some of these come directly from the book Die with Zero and a few are even my own):
- Coach a sport
- Hike Machu Picchu
- Backpack around Europe
- Run a marathon
- Write a book
- Ski the Alps
- Dine at a Michelin-star restaurant
- Take a cruise to the Caribbean
- Visit all the National Parks in the US
- Learn to speak Chinese fluently
- Attend the Super Bowl
- Go on an African safari
- Volunteer at a local homeless shelter
- Travel to all 7 continents
But What About Retirement Planning?
Let’s circle back to retirement planning because it truly is important.
Of course, I don’t advocate for a YOLO approach to life and personal finances, where you live only for today with little thought for tomorrow.
I simply think we need to understand the trade-offs we are making so that we can:
- Save for a financially secure future,
- Align our money and values to optimize our resources at every stage of our lives, and
- Maximize life experiences when they are most meaningful (and possible)
At a minimum, stop taking the approach of “save as much as you can for retirement.”
Having a solid retirement plan in place where you know exactly how much you need to retire comfortably (ideally translated to the amount you need to save each month) allows you to then shift your focus to building an intentional life at other phases.
For some, this exercise may show that they are falling short of being ready for retirement. Knowledge is power and this may mean holding off on some things, cutting expenses, or increasing income. Even so, there’s still a balance needed in saving and enjoying life.
For others, knowing this “enough” number for retirement means that they can then look at other areas of their finances and see how to best intentionally maximize life in line with the answers to the questions above.
Learning how to spend money is just as important as learning how to save.
From my experience in financial planning, I’ve found that those who focus too much on saving for the future never learn how to enjoy (or spend) their money, and that doesn’t change when they retire. They neither prioritize their life during their peak years nor enjoy it during retirement.
Final Thoughts
Perhaps the best approach to prioritizing financial resources and priorities is to ask yourself the following questions:
- Is this money going to provide me with more life satisfaction now or later?
- What am I giving up experiencing now if I spend this money on something else or assign this money to other goals?
Money is an incredible tool that, when aligned with our values, allows us to fully experience life. Ensuring that we are able to take advantage of amazing opportunities through each phase of life is just as much a gift to us in our later years as saving financially for retirement.
Here’s to a life without regrets.
