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Planning for an Uncertain Future
April 2020

Apr 30, 2020 | Business Owners | Families | Retirees

While the future is always unknowable, sometimes it feels more unclear than others. Financial planning involves looking into the unknowable future and considering the desired and possible outcomes.

How can we plan for a future if we don’t know what it will look like?

• Get clarity on what is knowable: where you are and where you’ve been.

o Review your assets & liabilities to know how much you own and how much you owe.
o Review your past cash flows to understand your spending. Evaluate what is mandatory and what is discretionary.
o Reflect on your values to determine important elements to include in your plans.

• Be open to many different possibilities.

o Look to the horizon for outcomes that are possible for you, starting from where you are.
o Evaluate the desirability of possible outcomes.
o Determine what is within your power to increase the likelihood of desirable outcomes and decrease the likelihood of undesirable outcomes (or limit the damage if they occur).

• Be prepared to adjust course as needed.

o Consider possible alternatives if you encounter obstacles in your path.
o Accept that the unexpected is very likely to occur so you may need to adjust course to head toward a more desirable outcome if an undesirable outcome occurs or looks increasingly likely.
o Know that you might change – you may think that something is desirable but when you achieve it find it wasn’t quite what you wanted. Or you may end up with something you thought you didn’t want, only to discover that it is exactly right for you.

• Take action.

o Seek perspective – whether talking to a friend or getting assistance from a financial planner, talking through your possible future outcomes may help you define your next steps.
o Small actions make a big difference in your outlook in a world that can feel out of control.

The exercises outlined above will help prepare you to adapt more easily if an unimagined situation does occur. If you follow these steps, you will have the information and frame of reference readily available to make informed decisions rooted in your own knowledge and understanding of your financial circumstances, preferences, and perspectives.


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