People are worried. That's not surprising, given the headlines. But I'd like to see our collective sense of anxiety die down. It isn't helpful. Worse, it undermines our happiness in many ways, hurting our relationships, health and work. Anxiety also leads to terrible financial decisions.

As a human being, I hate to see my fellow human beings suffer. As a financial planner, I hate to see them make bad financial decisions. What can we do differently?

TELL ME A STORY

Jon Kabat-Zinn, executive director of the Center for Mindfulness in Medicine, Health Care and Society at the University of Massachusetts, has written that most of us spend an abundant part of our lives "enshrouded in thoughts, fantasies and impulses, mostly about the past and about the future, about what we want and like, which spin out continuously, veiling our direction and the very ground we are standing upon."

Why do we do this? In part because we're afraid. We fear life's uncertainties, its ups and downs. And so we make up stories to inhabit, and in those stories we grant ourselves the power to control outcomes. If I sell this fund now, I will avoid the coming downturn; if I pick the right investments, I will be rich; if I worry enough, I will be safe.

Trouble is, the real world is complicated: We don't know what's going to happen. That's a scary thought-and it's even scarier when we recognize that the thought (unlike many) is true. Our stories are fairy tales, minus the undercurrent of brutal realism that you'll find in Cinderella or Rumpelstiltskin.

NUMBERS DO LIE

Since we don't know what's going to happen, most of our plans are useless. In fact, they're worse than useless, because they distract us from the real work we need to do to be ready for whatever arises next in our lives-including our financial lives. We wear ourselves out making and revising plans meant to manage various hypothetical outcomes. Then, when something does go wrong, we are too weary to cope.

We're also surprised. Many people went into the recent bear market pretty certain that their portfolios would weather any storm. They had done the estimates and run the scenarios, or their planners had done it for them. The software promised that their portfolio mix gave them an 80% or 90% or 95% chance of meeting their goals and riding out downturns with acceptable losses, and they believed it all.

Why not? It feels good to imagine that you can predict future parameters.

Trouble is, no matter how expensive the software, such numbers are guesses. How could they be anything more, when they're based on only 80 or so years of market data? The data is simply inadequate to provide a full range of possible outcomes. In fact, no database can predict the future. This helps explain why our predictions are almost always wrong.

That's bad enough, but the news gets worse. When we have a prediction to focus on, we tend to ignore what's actually happening-so on top of the unavoidable surprises, we also suffer the avoidable ones.

MORE FACTS

As a result, it seems to me that financial planning needs to be rooted in the present. Less planning, more facts.

I once suggested to a friend that he ought to think about how much he should save, and we could come up with a number that would be sufficient to reach his goals. That's what you're supposed to do, right?

My friend gave me a funny look. After a minute he said "Hey, Carl, I have an idea. Why don't I just save as much as I can?" I felt kind of foolish.

My friend reminded me of something I know. It's healthy to focus on the things you can control. This is what it means to live in the real world, without fantasy and guesswork and anxiety.

Anyway, it often turns out that the handful of things you can control-at least partly-have enormous impact on your well-being. How much clients save matters more than their investment returns. How much clients decide to risk in the stock market matters more than stock market performance.

So, can you help clients save more, spend less, make small changes that will change their lives over time? Those become the important questions.

Things get much harder once you start trying to answer questions that require you to make assumptions about the future. For example, the discussion about conversions to a Roth IRA forces us to make assumptions about future tax rates and returns, and whether clients intend to leave the money in the account to heirs... and on and on. Chances are, at least one of the assumptions will be wrong. It's worth asking: How much does that decision really matter?