Dear Girlfriends,

Last month Steve, our grown kids, and I and drove down to Austin for the weekend. We ventured out of town on a winding ranch road and got lost. Our car has a navigation system, but it was preprogrammed to indicate on the display our final destination. Well, that didn't help. I knew where home was! I wanted to know WHERE AM I RIGHT NOW AND HOW IN THE DEVIL DO I GET ON THE RIGHT ROAD TO TAKE ME TO THE INTERSTATE? It took several minutes to figure out what was wrong and re-program our preferences, and while that was all happening, we were driving further away from I-35 . . . not closer!

Just like you need a map to determine where you are in conjunction with where you're going, you need a financial plan to do the same. You need to know where you sit at this moment in time (your financial assessment) in contrast to where you want to wind up (your desired financial state for retirement). For younger adults, you will also want to know where your road stops are; things like a home purchase, having children, and saving for their college education. But here's the kicker: you can't drive around for days, months or years without knowing where you are or you could be headed in the wrong direction - further from your financial destination.

Steve and I finally stopped "driving around in circles" last year. Why did we wait so long? No one told us that this is a critical step to helping us secure our final financial goal. Yes, it seems obvious to us now, but it didn't two years ago. Learning more about the process, I asked our personal Merrill Lynch financial advisor, Carol Meyer, why people (like us) procrastinate in having a financial assessment done. She said, "Many people are afraid of what they're going to find out. So they just put it off." WHAT? Well, that's just plain crazy! That's like not going to get your mammogram because you could get bad results. Wouldn't you rather know what steps you can take now to ensure your long-term health and quality of life? Well, of course. That's the only sane approach. Same with your finances.

"When I asked women about their top five nightmares, winding up a bag lady featured in almost all their scenarios, right along with not having enough money to retire safely. Yet when I asked those same women how much time they spent focused on investing for their retirements, almost all of them said either that they didn't have any money to invest or that they left the management of what they had to husbands or professionals. Here's something that keeps us up at night, that we spend most of our days trying to procure, that we don't care about for its own sake, and about which we either lie with regularity or are completely silent." Liz Perle, Money, A Memoir: Women, Emotions and Cash

Step one in securing your freedom to choose: Assess where you are today to determine how to best reach your final destination.

Re-programming my navigation,
Ellen

Posted by Ellen on February 13, 2007 11:30 AM  |  Category: Work/Life Balance and the Debit Card