Life in the Collins household has been in full motion as of late. Just after Thanksgiving we bought a van and expanded to a two car family. Then, late in December, my trusty Prius essentially died. We were able to sell it for a fair price, but we’re back to just one car. Of course, I was mildly devastated to lose my signature car.
As you may have seen on my Twitter feed, Alison has started receiving emails and phone calls from recruiters making inquires about her interests after graduation. All of these events have caused us sit down and answer the question: 10 years from graduation, where do we want to be? We’re calling our answer the “10-Year Plan."
We know what kind of medicine Alison wants to practice and we know where we want to be living, but what do we want our financial situation to be? What do we want our home to look like? What do we want our family situation to be? The answers to all of these questions, in broad strokes obviously, are even today impacting our decisions.
The vehicle that makes any plan work, especially our 10-year plan, is the finances. Money gives us the opportunity and ability to do things. Oftentimes we're firemen when it comes to our money. We think in the short term, patching holes and putting out fires. Since graduating college, we've been those firemen. Now, after years of hard work and planning, we're transitioning to a long-term view of our money. This is the key to wealth building... making financial decisions based on how they'll impact you 5, 10, and 20 years down the road, instead of how they'll impact you next month.
I like this long term, big picture, strategic thinking. While working for the Boy Scouts, I was routinely given high marks on my ability to see the big picture and execute on the small tasks to achieve that overall goal. While 10 years seems a long way off, and it certainly is, there’s no doubt that the buying decisions that Alison and I make today impact our ability to hit our 10 year goals.
A key to success in making financial decisions with long term thinking is to make them before they come. Money ebbs and flows, meaning it can show up quite unexpectedly and in large amounts. Delineating between needs and wants, and having a plan laid out for any and all "extra" dollars can accelerate progress. When you make decisions before money shows up, you minimize the chances that it'll be delegated to the wrong objective.
Getting to the point of long term thinking in your life is something that takes time, takes planning, and takes unity with your spouse. When you do get there, buckle up because there's nothing that you can't accomplish together.