Personal Finance column: Gray matters and gray matters |

Personal Finance column: Gray matters and gray matters

Danielle Howard

Heading into your fall season of life, there are more than 50 shades to consider as you look at the gray matter inside your head to the gray that is on top of it.

Inside, the brain’s gray matter contains most of the neuronal cell bodies. These cells oversee and impact our decision making, self-control and emotional perspectives on our monetary (green) matters, among other things.

It was previously held that, as we age, our brains get smaller. New studies negate this assumption, concluding that when older brains are “healthy” there is little brain deterioration, and that only when people experience cognitive decline do their brains show significant signs of shrinking.

How do you keep your gray matter healthy? Exercise, diet and becoming a lifelong learner are places to start. Check out the work of Dr. Daniel Amen in this arena. As we do our best to keep our brains healthy, we also need to embrace that aging does have implications.

Normal cognitive aging decreases our “fluid” intelligence — the capacity to process new information. If someone finds themselves taking over the financial reigns because of circumstance (death, divorce), they will have a harder time learning new skills in this area.

A white paper produced by the Center for Retirement Research at Boston College titled “Cognitive Aging and the Capacity to Manage Money” robustly explores how aging impacts our “gray matter” around monetary affairs. Their conclusions include that as people age, they should be able to manage the routine financial activities such as paying bills, discerning income from expenses and assets versus liabilities.

These activities are based on “crystallized” intelligence, accumulated knowledge built over time. However, normal cognitive aging decreases our “fluid” intelligence — the capacity to process new information. If someone finds themselves taking over the financial reigns because of circumstance (death, divorce), they will have a harder time learning new skills in this area. This fluidity also has to do with “reasoning” skills that may lead to risky or unwise financial decisions.

If you have been at the helm of your family finances, keep your brain healthy and stay astute. If you have a family member who has not wanted to take part in, or is not prepared to take over the financial wheel, communication and planning is key. Make sure there are trusted family members, advisors and other support in place to walk alongside them to minimize the potential for abuse in your absence.

Next, the gray on top of your head matters.

How you use your time, talents, knowledge and wisdom built throughout your lifetime and how your financial decisions align with what is paramount in your life is profoundly important and necessary in our world. For many, this is the “why” you want to grow, nurture and protect your financial life in the fall season of life.

In his fascinating book “From Age-ing to Sage-ing: A Revolutionary Approach to Growing Older,” Zalman Schachter-Shalomi shares what those entering elderhood have to offer. “Over and beyond an exchange of verbal information and technical skills, they transmit what can’t be acquired from books.

When the transfer of sheer data just isn’t sufficient, they impart the wisdom of a lifetime (including the personal attitudes, moral and ethical judgments, and aesthetic appreciations that characterized them) through the fire of a unique relationship, the give-and-take of a living dialogue with a younger student or apprentice. When an elder fertilizes a young person’s aspiring mind with his knowledge and seasoned judgment, the student receives a living spark, a transmission, that may one day blossom into wisdom.”

We need to redefine this season of life and “retire” the idea of retirement into singularly a life of pleasure and ease. Is this the best use of the gray inside or on top of your head? I warrant not. I encourage you to intentionally take care of how internal gray matter is functioning. We have a growing gray population (yes, you may disguise it, but it is there). Make sure that your financial life (green matter) is properly positioned to undergird and transport you through a fulfilling fall season.

Potential and possibility await in this wonderful season of life as you look at how to optimize all your green matters by fully utilizing every aspect of your gray matter.

Danielle Howard is a Certified Financial Planner practitioner. Her office, Wealth By Design LLC, is in Basalt. Visit her at Advisory Services offered through Cambridge Investment Research Advisors Inc., a Registered Investment Advisor. Securities offered through Cambridge Investment Research Inc., a broker/dealer, member FINRA/SIPC. Cambridge and WBD are not affiliated.

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