Financial planning gives you the freedom to dream

In a recent financial life planning meeting with a new client, I chatted with him about budgeting for overseas trips. He voiced his concerns about being able to afford expensive overseas trip once his salary comes to an end; he thought that, once he transitioned into retirement, he would be much more frugal when spending money.

I reminded him that this is the reason why the financial planning process is so important. While we plan for our retired clients to draw an income on a monthly basis from the monies that they have built up during their lifetime, we also plan separately for their holidays and other lump sum expenses. The planning process is critical to give them the confidence that they are not recklessly spending their retirement savings, and putting their retirement plan in jeopardy.

Don’t be frugal with living

I recalled the wisdom drawn from another client couple. They had been married for over 40 years, did not have children, and had sufficient monies to last their expected lifetime, plus some surplus.

I asked them what the point was in living a frugal life, just to leave money to nephews and nieces; I encouraged them rather to enjoy their savings themselves. I planned for two overseas trips in their budget, and urged them to consider where they would like to go.

A week later, a very excited Thomas phoned me to say that they would like to go on a cruise in the Mediterranean: was I absolutely sure that they could afford it? I reassured them, and they booked their cruise for three months hence. I had such pleasure in watching the excitement on their faces and in their voices, as the date for departure drew nearer. Thomas, prone to worrying, began to be concerned about how best to arrange his foreign exchange, and started watching the exchange rates. As the deadline got closer, Thomas and Felicity were uncertain about what wardrobe to pack as there was a certain number of dress-up dinners on the cruise, and they wanted to make sure they had suitable attire.

On their return we met to chat about their trip. I saw photographs of them sitting at the Captain’s table, beautifully attired, and of the various destinations they had visited. Their next question? “Can we afford a second trip?” I assured them they could, and the planning and excitement started all over again: where to go, which cruise line to choose, and so on.

Felicity is no longer with us, but I am so glad that she and John took these trips and that they had such fun in planning them. Whilst Thomas misses Felicity terribly, he at least has the memories of these fun times they had.

Article shared by Pat Blamire CFP® and Retirement Specialist at Chartered Wealth Solutions

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