Ellen writes in:
I’ve been reading The Simple Dollar for a long time. It’s pretty hard not to notice a few central themes in what you write about. Spend less than you earn and plan for the future and so on.
However, two of the things you talk about seem to flat-out contradict themselves. You talk alot about planning for the future but at the same time you frequently mention how unpredictable things are and how you’ll be doing something different in five years that you can’t predict.
If I’m going to be doing something completely different in five years that I can’t predict, what’s the use of planning for anything?
Ellen brings up a very worthwhile point. If your future is unclear, how do you plan for it? I think there are several key factors in play here worth looking at.
First and foremost, some elements of how you plan for any goal are the same. For example, there are very few big goals in life that aren’t rewarded by having some amount of cash on hand. If you want to switch jobs, start a business, replace your car, move across the country to be with your beloved, or any of thousands of other events that might happen in people’s lives, cash helps.
Even more important, if you radically switch your goal, cash still helps. If you think you’re saving to start a small business, but then you fall in love and decide to move to Boston, cash will help you when you make these new plans. If you’re saving to go back to school but then your spouse gets severely injured and you’re having difficulty making ends meet, cash helps you out.
There are many more ways to prepare for an unknown goal than just cash savings.
For one, transferable skills are always valuable, no matter what you’re doing in life. I’ve written about transferable skills before, but the core idea still holds up. There are some skills that you find yourself using over and over again in life, no matter what you’re doing. Communication skills. Time management skills. Leadership skills. Self-motivation. Adminstrative skills. Information management skills. These things pop up again and again and again in both personal and professional life.
For another, utility skills also come in handy over and over again. By this, I mean things like being able to fix a leaky faucet, replacing a light fixture, unplugging a toilet, preparing a good meal out of whatever’s in the cupboard, and so on. These aren’t necessarily things you’ll apply directly in the workplace, but they come up so often in daily life that having these skills makes you much more useful to have around in almost any situation and much more able to avoid having to pay overpriced repair bills for things you can easily do yourself.
Another valuable thing always worth building are worthwhile relationships with a variety of people. The more people you know well and in a positive fashion, the better off you are when you find your goals and plans for the future shifting. When I decided to make a career change, I found tons of help from the friends I’d built up. When we decided to move a few years ago, friends came through over and over again.
Simply put, there is always value in having a healthy amount of cash in your savings account, a variety of skills, and a variety of relationships. No matter what you choose to do in life or how radically the things you are doing change, a large subset of these things will come in handy for you. These things should be a part of any plan you have for the future, even though the specific plan you’re making may or may not end up coming to fruition.
What about planning specifically for certain things, such as going back to school? If you’re going back to school in a field that offers a lot of jobs and opportunities that would excite you, then I’d go back and study that field. However, if you’re just going back to chase one specific job and would dread other opportunities in that field, I don’t think I would return to school. A degree can open up a lot of opportunities for a person, but quite often the exact door you want to open doesn’t open for you. You need to be in a field where you’re happy with a lot of the options that might come at you.
It all comes back to one word: flexibility. The more flexible your planning is for the future, the better that plan probably is. That way, whatever does happen in your life, you’re in a prime position to take advantage of it.