Do you use scenario planning for life decisions?

Scenario planning helps you make important life decisions.

As we grow older it seems there are more and not fewer life decisions to make with more uncertainty about the future.

how do you decide?
how do you decide? — photo courtesy of Leah Jones

Where will you live? How will you manage health concerns — especially if health declines in later years?  How will you use your time? How will you spend your money? How will you manage family/spousal relationships?  How will you cope if death robs you of a loved spouse/partner?  How might you prepare for your own demise?

In The Art of the Long View, futurist and management consultant Peter Schwartz describes scenario building as a technique for organizational/strategic planning.  This book describes important strategic planning tools that businesses use frequently when considering options.  The techniques challenge leaders to visualize various futures.  Scenario planning techniques have also become useful forecasting methods.

Nobody should be surprised to hear that scenario planning has moved out of the boardroom.  It is now commonly used by life coaches to help people to make good choices when faced with important life decisions.

What is scenario planning?

Scenario planning is defined as a “Process of visualizing (1) what future conditions or events are probable, (2) what their consequences or effects would be like, and (3) how to respond to, or benefit from them.”

Coming soon — futurism — photo courtesy of Kevan Davis

Basically, scenario planning is an organized way of exploring the future by considering various future circumstances and developing two or three scenarios (narratives/stories) about the changes that might occur if such a future evolves.

By considering future events and consequences you can consider how you might respond and then make a life decision based on how you would manage your life in those circumstances.  It is a useful technique that helps avoid unpleasant surprises in life and for knowing how you might respond when/if such circumstances occur.

An example of scenario planning

Over the past few years my husband and I have considered where we should live during retirement.  We regularly debate whether we should sell our city home and move to our cottage at Lake Huron. Recent renovations to the cottage have included a new central heating and central air conditioning system and a large addition that made the cottage into a house.  As a bungalow, it would be suitable as a retirement home — no stairs, smaller square footage, open concept design, etc.

Our debate is whether we should down-size to one house and live at the lake.   Or should we continue to keep up two residences and enjoy the benefits of each place? Alternatively, should we sell both places and move to a condo apartment?

Here are three scenarios/narratives that I created about this life decision.

Scenario 1:  The large city house is sold and we have downsized.  Excess furniture, clothing, books, dishes, garden equipment and other ‘stuff’ has been sold or given away.  We made a good profit from selling a mortgage free house.  We moved to the lake and enjoyed many happy times during the busy summer months.  Friends visited and enjoyed the relaxed lifestyle.  Now it’s November and the inevitable cold, wind, and grey skies have set in.  Despite having been summer residents in the lakeside community for more than 25 years, we realize that we know very few of the ‘permanent’ residents.   Access to leisure activities or shopping means driving for more than 1 hour to the nearest ‘large’ community.  We have to change our doctor, our dentist, and our church. Various clubs exist but the variety of social activities is limited.  Life feels smaller with fewer options.

Scenario 2:  We decide to keep both houses.  In the city we enjoy access to all kinds of recreation, to cultural institutions and to many services including the full service gym and pool that we both use  daily. When we are at the lake we have a more relaxed lifestyle.  The wooded area around the cottage harbours many types of wildlife.  The pace is slower and offers a reprieve from the bustle and traffic of the city.  Maintaining both places means frequent 3 hour drives back and forth.  We own duplicates of most household equipment and appliances but have trouble remembering which fridge has the container of cottage cheese that was just purchased.  We pay taxes on two residences plus insurance, hydro, water and other house maintenance costs. There is extra gardening in summer, extra snow-clearing in winter, and lots of housecleaning — especially when entertaining.  Because we go back and forth, it is hard to feel like we belong in either community.  Owning two houses creates extra work, worry, and cost especially as we consider what supports we will need to pay for as we grow older and cannot manage all the physical work involved.

Scenario 3:  We sell both places realizing a good profit and buy a very comfortable city apartment in a well-kept condominium building complete with gym, pool and other recreational facilities.  The condo complex offers a variety of interest groups and clubs for the residents. When we want to enjoy the lake, we rent a cottage. We don’t have the yard work or the house maintenance. All of the amenities of the city are available for us and we have more time to attend concerts and to visit museums. While renting a cottage provides opportunities to visit other lake resorts, the cottages we rent do not have ‘history’ with friends or extended family which means fewer guests.  Because the condo building is geared to retirees most people around us share similar lifestyle choices. We get tired of listening to our neighbours complain about health, about politics and about each other.  We miss our garden, especially the fresh herbs and the flowers.  Our cats are restless and there is no good spot for the litter boxes in the condo unit.  Friends drop in less often as they don’t like to enter through the security gates or to face the concierge at the front doors.

The three scenarios used in this example about where to live can be tested against what we each know about the future we want.

Other scenarios about where to live can be developed as we consider variables such as health or finances.

Scenarios involving long term assumptions about health are difficult for seniors.  Denial is easy as we want to protect ourselves if scenarios have bad or sad news.  However,  using scenarios to consider realities of aging helps to foresee decisions that need to be made.

The scenarios give a method for making choices and creating an understanding of how these choices may work for us.

Benefits of Scenario Planning

By reducing uncertainty and identifying available options for life decisions, scenario planning is a useful technique for retirees.

Inevitabilities can be anticipated.

Unpleasant surprises can be avoided.

Scenarios help as you rehearse possible future circumstances.  They offer guidance about how you might act when various life situations present themselves.

While scenario planning is not useful for life decisions based on an emotional response, it can work well for decisions that need practical and rational approaches.

By constructing scenarios that are congruent with your personal life, it is possible to imagine various possible outcomes and implications of decisions.

My husband and I are still contemplating where we will live.  In this post I described three scenarios but we have considered many others as we try to foresee a future that allows both of us to continue to enjoy our postworksavvy retirement while making realistic plans for the future.

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2 Replies to “Do you use scenario planning for life decisions?”

  1. I wish I had thought to use scenario planning four years ago: I was renting 25 miles away from my work and I found out that my company may be being taken over and that my job may move closer to where I was living (but maybe not). The industry I work in is quite slow moving, so nothing happens very quickly. I thought I should wait to find out where my job would be located, then buy somewhere near work.
    I now know that my role would be split between the two locations, but have been working at home during the time due to covid. It’s only now that I’m going back to the office, but I’ve been priced out of the market near my current home (I was in a fantastic financial position pre-covid), so am having to buy near my ‘old’ work location. The commute in that direction is terrible, as most people commute in that direction, from a town to a city. When I was commuting before covid, I was going against the traffic, so it took less than half as long as in the opposite direction. All my friends are near my old home.
    What I should have done was assessed four possibilities and listed pros and cons of each:
    1) Buy near current home and job moves to near current home – IDEAL!
    2) Buy near current home and job stays in ‘old’ location – THAT’S THE SAME AS I WAS DOING
    3) Buy near current work and job stays in same location – EASY COMMUTE BUT MILES FROM FRIENDS
    4) Buy near current work and job moves to ‘new’ location – NIGHTMARE COMMUTE

    Just by doing this would have made me realise that I should have bought near my current home.

    I’m so annoyed and frustrated with myself, as I learned about scenario planning from a business perspective from a course I did years ago, but have never had to apply it. I can’t believe I was stupid enough to sit back and ‘wait and see what happens’ while watching prices escalate (and now interest rates as well). The houses I was tentatively looking at in 2018 are now selling for over 40% more than they were then, so it’s been a very expensive mistake.

    1. Scenario planning can be used for personal as well as business decisions. All of us experience regret when we decide not to act and, in hindsight, see our mistakes. This often happens with financial decisions. It’s not useful to dwell on the things we should have done, rather, let’s try to learn the lessons and move on.
      I hope you can find a way to move forward with the decision you made. Good luck!

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