What choices are you making?

Separating the urgent from the important

The years between 35 and 55 are possibly the most challenging of your life. This is the time when most people are raising a family, moving up in their career and beginning to think about financial planning in a serious way. The demands on both your time and money can pull you in several directions at once.

Everybody knows that building up wealth – whether equity in your home or retirement investments - is important. These things provide comfort and security for the future. But that future focus means wealth accumulation rarely feels urgent. Other competing priorities with closer deadlines tend to crowd out longer term concerns. Faced with the choice of increasing pension contributions or building an extension on your house to create more living space for your family, most people will opt for home improvements. After all, you get the benefit sooner.

The incremental spending choices you make every day are similar, whether you buy a €3.50 cappuccino on the way to the office every morning or keep revolving your credit card balance month-to-month, incurring interest charges along the way. Then there is the bigger stuff – like school fees or replacing your car when necessary. There is always something else that you have to pay for.

What you actually spend your money on reveals your preferences, though, despite what your stated intentions or best wishes are. The lesson here is that some things you decide for yourself, but other things will be decided for you. Nobody’s life is a smooth curve where expenses tail off evenly later in life allowing you to save comfortably without effort. But the future is coming anyway. It’s better to be ready for it.