Without Structure and Schedules the Value of a Dollar Can Become Meaningless

Greetings from Texas, Dallas and the Gulf Coast! The Gorski family is spending their annual summer vacation with extended family in Dallas and along the shores of the Gulf of Mexico. For me, it's a semi-working vacation so my brain isn't turned off and I wanted to included a short 'For your Consideration' this month. Granted it won't be chock full of ideas, theories and advice, but rather I wanted to discuss one observation I have about vacations. It's not an idea that will rock the foundation of academia, as I'm sure everyone has had a similar epiphany once home and we take a look at the receipts. Vacations cost money! Lots of Money! It's always more money than anticipated no matter how many vacations we have gone on in the past. Prior to departure we assume what activities we will partake in and then construct a reasonable budget and lie to ourself that we will be disciplined. However, once the vacation begins we all become Caesar, clapping our hands loudly and demanding the delivery of the finest wine and the grandest feast. What's an extra meal at that overpriced beachside restaurant or the 'VIP package' at that SPA? Do we have the money set in our travel budget?? Who Cares!? We're on vacation!! When I do budget planning with clients I conservatively overestimate variable expenses and greatly overestimate vacation expenses. Which is all ok....there is nothing wrong with occasional splurging (as always, within reason). What is the purpose of our hard work if not to enjoy the fruit of our labor. However...... What is the reason that we lose our collective minds on vacation and go through money like water? A big component is our desire to have fun, but I think the real reason is that we are out of our normal environment (literally and figuratively). We are not in our normal routine.....our day to day structure, filled with rules and schedules and a general plan. We break free from the confines of 'everyday life' and enter a completely new sense of what is reality and what is acceptable behavior. Or in this context; normal spending habits. Rules and structure goes out the window and discipline is replaced by desire. This type of behavior a few times a year does limited damage to a long term financial plan. But there is that one time, when we all take the longest possible break from work, when retirement begins. Upon entering retirement the most rigid schedule we experience, the work week, goes away. It gets replaced by seven consecutive Saturdays. This does not mean that retirees do not need to conform to a new disciplined schedule, including continued financial discipline. It's quite the opposite. In fact, retirees need to put their discipline into hyperdrive. The first few years of retirement are especially important as people get used to a new, seemingly infinite, amount of free time. Even as responsibilities decrease drastically, the need for structure and a schedule does not. This does not mean that vacation spending, discretionary spending and entertainment spending can not increase in retirement (if that is a goal and as long as there is proper planning). However, what I try to teach more than anything about retirement is that it cannot and should not be treated as a 20 to 30 year vacation, but simply as a different, less labor intensive way you will be paying for your lifestyle and spending your time. The rules that existed prior to retirement do not go away, but rather become more important as there is less time to recover from mistakes. But for now, if you are like me and are on one of those breaks from the real world, which is temporary and includes a change of scenery, you go ahead and enjoy that sixth bottle of wine. I won't judge you, if you don't judge me.

Blue Sky Financial Group
3478 Buskirk Ave. Suite 1000
Pleasant Hill, CA 94523
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