I am facing a monumental life transition – one that evokes both excitement and terror in me.
I will be a father in a few months, and it’s a role I know I will have to become accustomed to very quickly.
The birth of our first child heralds a significant shift for both my wife and me. I am prompted to reflect on all life’s transitions; many are personal – completing steps in education, marriage, parenthood, grieving the loss of a loved one – and quite a few are related to careers: our first job, a career change, retirement.
Each of these transitions has financial implications.
Right now, I feel there may be no bigger financial transition than welcoming a little human into this world. A Fin24 article in January this year calculated education costs (Grade R, 12 years of public schooling and three of tertiary education) at a staggering R1,6 million (it doubles for private education). While this is undoubtedly a cost to account for in my budget, I find myself fixated on comparatively negligible nappy price tags.
My anxiety is mitigated by the fact that I have planned financially as thoroughly as I can for the arrival and growth of my child.
A tool that we use in our Planning process at Chartered Wealth Solutions is the Sigmoid Curve, conceptualised by organisational management expert, Charles Handy, and expanded on by Bob Buford in his book, Halftime. Let me explain it if you are unfamiliar with it – I am sure you will find benefit in the philosophy underpinning it.
Curve 1 represents that sharp curve that you experience when, for example, you are starting your first job or having your first child. Your knowledge and experience are small, and tasks may be difficult and time-consuming.
But as you work at it, you become more comfortable and competent. Understanding the nuances and the ability to overcome challenges becomes a strength. You start mastering the craft.
Then Point A arrives – an a-ha moment that anticipates a transition ahead. You could easily suppress the quiet warning and continue as is. Then the change happens anyway, and you have not planned for the necessary adjustments to accommodate this new normal. You plod along, trying to derive meaning from what used to be most important before the change. But things start to become harder and harder. Your life starts to feel meaningless or out of control.
You are heading down to Point B.
How do we avoid this decline? We plan for the life shift before it happens. We have envisaged how our lives will change and how we will adjust our time management, careers, communication and social lives.
This is creating a second successful curve upwards, Curve 2.
Our baby is due in a few months, but I already know how to burp him or her. I know what baby equipment we need and have set up investment structures to make provision for the changes. That is the message of the Sigmoid Curve: envisage the changes, plan, implement … and then enjoy the life transformation!
Thriving through life’s changes can be a simple choice.
Tom Brukman is a CFP® and RetiremeantTM Specialist at Chartered Wealth Solutions. He heads up the company’s Western Cape branch.