Updated on 08.25.11

Making Plans for a Muddy Future

Trent Hamm

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.

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  1. krantcents says:

    You can’t go wrong by planning. A few years ago, I decided to improve my writing by reading more. I read over a hundred books in a year. This skill at the time had no direct impact on my career or future. It is certainly helping me now that I am blogging.

  2. Cheryl says:

    Good post! I’m printing it off and discussing it with my teenagers. Thanks.

  3. lurker carl says:

    Having goals of all sorts will help predict what your future will be, planning is necessary to reach your goals. Making goals and planning for their successful attainment makes your path in life more clear and predictable. Without short and long term goals, there is nothing to plan for, thus a muddy future.

  4. Des says:

    I don’t think it is always so cut-and-dried. When I was 25, DH and I decided we were ready to start trying for kids. I started to watch for good deals on used baby items on Craigslist – and we got some real steals! Eventually, I had everything I would need for that kid up to about age 4, and at 10% the cost of retail. I was totally prepared – but it turns out it is very unlikely for me to conceive naturally. After weighing our options, we decided to adopt kids from foster care – they are 4 and 6. I ended up giving away most of those items (they were a painful reminder), but not before storing them in our house for three years.

    Life is what happens while you’re busy making other plans…

  5. moom says:

    @4 That’s absolutely not what Trent is saying in this post, one of his better ones. He is saying, don’t plan so specifically.

  6. Dan W. says:

    It’s a trite but is always true: who knows what the future holds? If you’re the type who make plans for the next three years and stick to them no matter what, then planning can be a prison.

    I guess the only way to deal with a muddy future is to know when to stick to a plan and when not to. No plans in advance (like not planning your retirement) can be pretty scary. But to consider plans as your life’s neat blueprint, that too is scary.

  7. Kevin says:

    What’s the old saying? “If you want to make God laugh, tell him your plans.”

    The ability to think and plan long-term is what separates adults from children. It’s a sign of maturity, and a reliable separator of successful people from failures.

    People who are unable to plan beyond the weekend are stereotypically strapped for cash. People who plan long-term are generally much more successful. They aren’t caught off-guard when their car breaks down.

    Here’s a newsflash: Your car WILL break down. You WILL get sick and need time off work. Your water heater WILL eventually need to be replaced. If you’re not already expecting those things to happen, then not only will they be financial calamities for you, but they’re a marker that your life in general is chaotic, disorganized, and full of drama.

  8. threadbndr says:

    I like Trent’s point about being flexible – and I’ll take it down to a micro level.

    I save in several accounts: an “annual bills” bucket, a “vacation” bucket, a “house repair/upgrade” bucket, a “car repair/replace” bucket, etc. While my ‘bucket plan’ keeps me from feeling guilty spending budgeted funds on something planned for, in reality all those individual accounts are available if the excrement meets the rotary air moving unit. They are a back up emergency fund in addition to the “real” efund and acutally can extend the three month fund out to six or more.

    That’s just one example of how being flexible with money can serve multiple purposes.

  9. lurker carl says:

    You’re unlikely to realize your goals when they aren’t realistic. The same when the plans are inflexible, you lose focus or abandon the plan when life happens. No one is able to predict the future or forsee every obstacle but learning to make short and medium term goals and bring them to fruition will make planning for the long term easier. Your long term goals will be a complex series of related short and medium term goals.

    Practice, practice, practice your way to success.

  10. Jules says:

    Randy Pausch quoted someone else when he said, “If you don’t have a plan, you can’t change it.” Truer words have seldom been spoke.

  11. When you hear someone say “planning for retirement” it is important to understand that it will be a moving target. The idea is to spur thinking, goal setting, and action. As with most long term planning, periodic evaluation will be necessary to account for unforeseen events and inevitable shifting of priorities and goals. The process itself can not only help you more clearly define your goals, but also provide the freedom and flexibility to change them.

  12. Karen says:

    Future what future……the world is going to end on 12/21/2012………bwahahahaha!!!!!!

  13. lurker carl says:

    Why didn’t the Mayan’s predict the demise of their civilization? FAIL.

  14. Georgia says:

    I would often hear my customers at the local Savings & Loan ask why save as prices kept going up. And this was in the 70’s and 80’s. I said there was never a reason not to save. If you only had $50 saved and bread was $50 a loaf, you could live for another week. Even if savings get lowered by inflation, etc., whatever you have helps you hold on for another amount of time.

    Of course, if you’d like to poor and broke, never bother to save.

    And, I found out another thing working at the S&L, most savings is done during the hard times, not the plentiful times. Sure surprised me.

  15. Thought you might like this quote by Sheryl Sandberg, CEO of Facebook. “The reason I don’t have a plan is because if I have a plan I’m limited to today’s options.” I just did a blog on this which will be published on 8/30 at inspiredsavings.com. I agree with Trent that skills are transferrable and staying open to new possibilities doesn’t contradict having goals.

  16. Andrea says:

    I think in Trent’s current stage of life his life has taken a drastically different view from five years ago where he was recently married, just had baby #1, but at some point life usually settles down and there is a strong current of predictability to it.

    The kids get older yes, but the school calendar keeps things on a pretty stable pace for many years.

    You do need a plan, and cash certainly helps execute against what comes up with life (and stuff will absolutely come up), but to say that things will be radically different five years from now is a bit of a stretch in my opinion.

    Be flexible, but expect a good deal of sameness too.

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