Don’t delay on taxes, or future planning

Time often lobs curveballs at us. As John Lennon sang “life is what happens to you while you’re busy making other plans”.

As it turns out, the speed of time is a biological ‘thing’.

Our brains have evolved from what was good for our ancestors’ survival.

So, our brain plumbing (hormones, chemicals etc) is really responsive to ‘now’, ‘coming up’ and pretty unresponsive to ‘next month’, ‘next year’ or ‘next decade’.

We are much more responsive to what’s gone wrong and what’s about to go wrong than we are to what might go wrong in the future.

It’s why we tend to be good at day-to-day and short-term planning, but not so good at the further out stuff.

It’s why everyone is on what we might call the ‘planning spectrum’.

At one end are those who’ve trained their brain plumbing to pump and to motivate planning.

They are the ones who make the most of each tax year, and who foresee the financial strategies that need to be thought of well in advance.

They are the ones who have wills and are more likely to be the ones whose wills allow for their tax and Centrelink strategies.

And ideally, they are the ones who bring their family along with what we call ‘their timeline’.

You might do this yourself: grab a blank page and draw about five columns – one for each decade.

At the top of the first column, write the ages of your family – you, your parents, your kids etc. Do the same for each column, adding 10 (this often draws a gasp).

Now, one row at a time across each time period, from left to right, write down where you will live, your work, what will float your boat, what income you need, your assets and debts, and the things you want to be able to do for your family.

It’s fine if there are blanks and unknowns.

It’s the start of not ending up on the wrong end of the planning spectrum: missing out and being caught out.

• Rob Brown (pictured) is a director and strategic planner with Deniliquin business Peppin Planning.