Financial Planning

There is a certain amount of pleasure in doing financial planning.  There is also a certain amount of uncertainly, which leads to a certain amount of terror.

We have a spreadsheet that goes out about 35 years, projecting what we think our extraordinary expenses will be -- trips, cars, expenses related to our child, to our house.  Overall, we're in good shape (resisting the urge to rap my knuckles on a piece of wood), and even if we do everything that I forecast, including reserving a large amount of money for 'surprise medical expenses' and a large amount for 'transfer to daughter', we still end up, at the end of that period, with about forty percent of our current assets.

The terror comes in when I wonder if that picked out of thin air number for surprise medical expenses is a reasonable number (it comes from a combination of wishful thinking and an estimate of what we would have to pay for health care coverage should my wife quit her job), or whether that estimate for adding a room and elevator to our house really will cost much more, or, for that matter, whether it's a good idea at all.

Its also true that although I can primly write trip every two years, thinking that those years are when we go to Europe; and the intervening ones are when we tour the US, the fact is that in my heart I'm thinking France Every Year.  That's about ten thousand dollars a throw.  You can only do that so often before it begins to affect the bottom line.  And though I like to think that if we just had a house in France....thats not likely.

I remember when I first started to model our expenses, about 25 years ago, when I realized that my off-the-cuff estimate of what we spent each month was in fact about 40% of what we actually spent.  That was startling.  This -- well, its not so bad.  Looking at the numbers keeps me grounded.