Your financial decisions affect every decade of your life.

Originally appeared in The Indy Star

Reminiscing with some friends last weekend led me to a very strange place. I found myself adding and subtracting decades on and from my current reality. I was trying to ascertain the ease with which I navigated or will navigate my financial life. “Is life easier or harder than it was 10 years ago, and will it be easier or harder 10 years from now?” I would ask myself. It was an unexpected and eye-opening exercise. My big takeaway was surprising: My financial life will be incredibly difficult at age 49, and it will remain difficult until I’m 56.

I don’t know why, but from what I’ve gathered, people tend to think their financial lives get easier over time, not harder. Personally, I know I’m saving aggressively, refusing to take on unnecessary financial obligations and dodging lifestyle creep, yet the writing is on the wall for me. My early 50s are going to be hard. I’ll have two teenagers in the throes  of postsecondary education, I will have passed the halfway point of my career, and the pressure to achieve income independence will become palpable. And unlike my 20s, 30s and 40s, any “I’ll do it later” excuse will be undeniably absurd. Whatever financial hope I will have maintained throughout my 30s and 40s will meet the cold, hard surface of mathematics. Hope, once again, will prove to be a terrible financial planning strategy.

Sit back and think about what the hardest decade of your life was or will be. Go ahead and do it right now. What 10-year period was or will be marked with overwhelming expenses, lesser-of-two-evils decisions and excruciatingly high stakes? Better yet, let’s put pen to paper so you may see what’s going on.

Grab a piece of paper and a writing utensil. Draw a giant “L.” You’re going to make a line graph. Along the bottom of the graph (x axis), list your age in increments of five. Start at 20 and end at 100. Feel free to mark major events in your life on the x axis for reference (e.g. birth of child, home purchase, child in college, retirement, etc.).

Next, populate the y axis with the numbers 1 through 10, with 1 at the bottom (representing easy) and 10 at the top (representing hard). The y axis will allow you to measure the financial difficulty of your life, taking into consideration stress, magnitude of expenses, difficulty of challenges, amount of income and whatever else you think makes your financial life hard or easy.

Draw a line representing the difficulty of your financial life over time, taking into account the past, your present reality and your projection of the future.

Draw it now. I’m waiting. Seriously, do it. The rest of the column depends on it.

What do you notice? Unless you’re a delusional robot, your 40s and 50s were or will be much harder than you originally thought.

Every decade is peppered with housing and transportation decisions, but beyond those common threads, your decades are different because of family dynamics, increasing income and expenses, and the nearing of your career’s denouement.

Consider the primary challenges of each decade.

Your 20s may have been tainted with student loan debt, the establishment of your career and the creation of your financial independence, but all things considered, your 20s were tolerable. Your 20s were hard because you probably didn’t know what you were doing. I know I didn’t. The financial challenges of your 20s pale in comparison to what’s on the horizon.

But first, a respite.

From what I’ve witnessed, your 30s are far and away the easiest decade of your financial life. Your income begins to grow, you’re putting down roots, and you’ve learned from the relatively small mistakes of your 20s. Lenders are more willing to extend you credit, and you’re enjoying the love/hate relationship with discretionary income.

Anecdotally, I believe the most difficult aspects of your 30s revolve around lifestyle creep and the acquisition of stuff. Lifestyle creep describes the practice of expanding your lifestyle as your income grows. It reeks of missed savings opportunities and increased dependency on increased income. Simply put — make more, spend more. It’s what the U.S. economy desires and what your personal economy disdains.

Your 40s are where your financial life starts to get interesting. If you had your first child by 26 years old (the approximate average age of an American woman’s first pregnancy), then your 40s are filled with all the expenses that come with having a teenager. If you haven’t learned from your spending mistakes, your increased level of discretionary income becomes an enablement tool, not the commonly perceived fruits of your labor. That’s what’s so terrifying about mistakes in your 40s, and your 50s for that matter — the mistakes are huge.

When I get the opportunity to chat with folks in this age group, they’re always equally surprised and relieved to hear so many other people their age are struggling. The assumption that financial stress subsides as we age is a false one.

The anguish of your 40s doesn’t end at 50. Statistically, you’re much closer to the end of your career than the beginning of your career. Time is ticking away, and your expenses may still be growing. It’s very possible you still have children in college, you may have started payments on your Parent PLUS loans, if that’s the unfortunate path you chose, and your parents’ potential financial challenges may start to become your problem. Whatever happened to gliding into retirement gracefully?

Your 60s and beyond are only relatively easy if you sacrificed for the future, from the beginning. If you didn’t, your line continues to climb again. And if you didn’t do a great job of creating independent adults, your grown children now add to the magnitude of your line.

Knowing what you know now, draw your line again. Does it look the same? If your original line didn’t taken into account all the challenges and your preparation for the challenges along the path, then your second line will certainly be a more educated guess.

The financial industry struggles to get people to prepare for retirement, despite the millions of dollars allocated to messaging and awareness campaigns. Yet no one tells you how hard your everyday life will get as you progress toward retirement. You can mitigate your risks by viewing each financial decision on a wider spectrum. Your decisions don’t affect only your current reality and your retirement; they affect all the years in between.

Good luck, future you.

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