Rand Spero

“IT DOESN’T MATTER IF our planned trips might jeopardize our retirement savings.” The word “jeopardize” was spoken with a sarcastic tone.
It was clear my two financial-planning clients didn’t appreciate my message. They were adamant. Their 10 pricey National Geographic trips, which would span the globe, must remain on their bucket list.
So began a challenging chat. Based on their excitement about their retirement wish list, it would have been easier to simply applaud their exotic plans.

ARE THERE TIMES when we waste too much energy in pursuit of a good deal? I have clients who get so caught up in proving they’re smart consumers that they can neglect their own needs.
One client runs a successful business. She’s saved more than enough to retire early, should that become her goal. She’s an outstanding negotiator. The problem is, her diligence can sometimes cause her stress.
She and her husband have young kids.

WHY DON’T WE SPEND our time and energy on financial issues that have the greatest impact? We’ll drive to a more distant gas station to save 10 cents a gallon, but fail to do all the maintenance needed to extend the life of our car. What lies behind this sort of behavior? The savings from getting the best price per gallon is concrete and immediate, while maintaining our car is long term and abstract.

GIVING GIFTS DELIVERS significant emotional and health benefits, or so says the research. But I find much depends on how the actual giving takes place.
My best giving lesson occurred many years ago. At a rural busstop on the island of Crete, off the coast of Greece, I sat next to an old local woman dressed in ragged clothing and torn shoes. Neither of us spoke the other’s language. She carried with her a small bag of fresh peaches and motioned for me to take one.

WE’RE FASCINATED by the recent college admissions scandal—and the wealthy parents and celebrities who were arrested. This drama has all the elements of a reality television show. The parents, who get starring roles as villains with no moral compass, scheme to ensure their children gain admission to sought-after colleges.
The lively plot doesn’t bother with common concerns, such as how to afford the high cost of college tuition, which continues to rise much faster than inflation.

A NEIGHBOR COMPLAINED to me that his car insurance rates soared after a fender bender. I assumed that he or his wife were involved. But it turned out he was referring to his daughter’s accident. Even though she was 27 years old and had a good paying job, he continued to assume financial responsibility for her car. Is this smart parenting—or does it stymie our children’s transformation into well-rounded adults?
When my friends and I graduated college,

MY ELDERLY MOTHER’S credit card was recently compromised. This required her to move all her automatic payments to a new credit card.
That, in turn, prompted her to reevaluate these various charges. Her cable bill, for instance, had gone up more than 15% over the past two years. My mother complained that, while she gets many channels, she only watches broadcast TV. She dropped the cable package.
As she added the autopay information to her new credit card,

OUR EGOS CAN TORPEDO our investment decisions. Here are four examples, plus some suggestions for how to avoid these pitfalls:
1. Confirmation bias. People often support their strong financial opinions by only seeking out confirming information. One of my financial-planning clients worried about inflation and its potential impact on his savings. He only read articles that stated inflation and interest rates would soon be going through the roof. But this economic prediction didn’t come to pass.

MY BIGGEST INITIAL mistake as a financial planner: underestimating the power of emotions. My office is located near top universities such as Harvard, MIT and Boston University. I assumed my well-educated clients, many with strong quantitative backgrounds, were simply looking to me for additional analytical insights.
Instead, my clients proved to be as human as everybody else. One top academic statistician, who claimed to be frugal and cautious, shared with me an annuity policy he purchased from a close friend at his church.

THE OLD ADAGE SAYS it’s never too late to change. Yet, once folks over age 50 decide they need to change careers, moving early has some key advantages:

It takes time. Career transitions can be slower than anticipated.
It legitimizes the move. Switching before the traditional retirement age may demonstrate your commitment to a new career.
It’s enjoyable to switch. If you know things aren’t currently working, why not make the change?

I faced my own career-change decision at age 51.

FAMILY MEMBERS OFTEN look to me to “sort out” their financial problems. That’s no great surprise: I’m a fee-only financial planner. But I’ve resisted the “financial fixer” role.
Instead, I try to act more as an educator—by reframing the issue at hand and encouraging family members to take an active role in solving their problem. Consider three examples:
1. I have a relative who graduated from an expensive university. He was understandably concerned about his high level of student debt.