by Kristen Perez, CFP®


February 2nd is Groundhog Day, a day when we gleefully look to a large species of squirrel to provide our 6-week weather forecast.

Isn’t it nice to have a forecast?  Even if you can’t change the weather (because I haven’t figured out how to make the clouds move at my command), doesn’t it give you a little sense of control just knowing that you’re probably going to need your umbrella next Monday, or perhaps that it actually has rained 30 of the last 100 years on the day of the year that your daughter is getting married, so you better have a plan B for your daughter’s outdoor wedding venue?

The Punxsutawney, Pennsylvania groundhog named Phil has been rated as accurate 39% of the time.  I don’t think I would plan an outdoor wedding based on that kind of record, but I can definitely relate to the instinctual desire for a forecast that probably led to this custom’s ancient origins.

Here in our world, I am often helping clients answer questions like: Can I retire in 5 years?  How much can we spend when I retire?  Wouldn’t it be nice to have a forecast so we know what to plan for?

Here’s a solid prediction: 100% of the time, financial planning means building something actionable out of a lot of uncertainty.  What if I need long term care?  What if we have another Great Recession?  What if inflation is higher?  What if I live a long life?

Luckily, a lot more of financial planning can be controlled than the weather.  Even if we don’t know exactly what will come our way, we can still exercise control over some of the biggest variables, like how much we spend, and how long we work (sometimes).  For other uncertainties, we can identify when it makes sense to protect our weak spots, like securing disability insurance while we’re working.  When the forces seem stronger than winter weather, and we question what it is we really can control, we can look at what is likely to happen and the range of possibilities, and determine which options are most likely to help us meet our goals.

Once we have a plan, we exercise the control over those forces where we have it.  Then we revisit the plan regularly to see how we are tracking.

Better planning than Punxsutawney Phil, don’t you think?