There’s always so much talk about the journey in order to achieve your dreams and goals. And don’t get me wrong, the road to making these dreams a reality is often a long one which is why we spend so much time focusing on it. But what we don’t focus on enough is the feelings and emotions that come with reaching the mountain top.
Through my wealth management practice, here is what I often see happening. Cathy and her husband John have been saving for 10 years to buy a second home down in the Outer Banks (OBX). They go every year with the kids and their extended families making those North Carolina beaches feel like a second home despite being renters. When I first started working with them, they had big dreams of one day owning a place in OBX to make sure that these family vacations would continue for future generations.
After a decade of planning and saving we discuss during their annual review that they have reached the exciting moment where financially they are ready to start looking at properties. Cathy and John are so excited and quickly begin combing through Zillow and Redtail. They fly down to North Carolina, meet with a real estate agent, and this is when things start to become real.
Don’t get me wrong, the couple is over the moon happy that their hard work and all of the planning we did together has paid off. But they have always been disciplined about setting aside extra funds and now like the flip of light switch they have to go from saving to outlaying a large sum of money.
When this realization occurs, panic sets in. I have seen two extremes happen (and everything in between). Some people get so excited that they can finally spend this money that they go overboard and start overspending in all areas of their life. They need brand new expensive furniture to decorate both this second home and their primary home. A Mercedes would look great in the driveway pulling up to the beach house, so we should probably get one of those too. I call this the pent up spender. That person that has been restricting themselves for too long so now they feel free being able to spend. The key to combatting this problem happens during the journey. You can’t be so focused on saving for that big thing (in this example a beach house) that you forget to enjoy and live life along the way.
The other extreme that I see is the person or couple that has gotten so used to saving the money they panic when it comes time to write that check or wire the funds to the mortgage company. Let me start by saying that these fears and thoughts are valid. When you are on such a long and important journey like saving for a home where you want to make memories for decades to come, you worry that by making this jump you could be making a mistake. Some of the common questions I hear are “what if this isn’t the right time?”, “are you sure we’re ready?”.
Something I do with my clients when we are making these big purchases is to celebrate with them. They have worked incredibly hard and this needs to be acknowledged and celebrated. I love looking back at old notes I have and sharing with them where we started, the choices they made to get to this moment, and showing them where we are today. This story telling often grounds them and brings them back to that excited present moment. The second part of the work that we do is going through the financials. Walking through the what-ifs and making sure that the numbers make sense, and this is lifestyle change that they can afford to sustain.
I encourage you to save this post so you can come back to it when you have reached that mountain top, and it is time to spend the money. The journey right now may feel long but before you know it, you will be living your dream life.