The age-old saying “Don’t count your chickens before they’ve hatched” is certainly coming home to roost this week. After a rip-roaring start to the year, the stock market hit some serious turbulence in the first week of February.

The S&P 500 lost 4% last week and has had a rocky start to this week. Before the drop, investors enjoyed a 7.5% gain in less than twenty trading days. Based on that pattern, the market was on track to jump 158% this year.

Anyone with money invested in the stock market was probably feeling pretty good in January. Last month’s gain was the highest for the month of January since 1997 when it rose 6%. Back then the market continued its upward trend, climbing 31% for the year. We can only hope to replicate that performance.

Economists often discuss the wealth effect, or the inclination for consumers to spend more when they have a higher investment balance. Seeing improved balances due to terrific gains in stock and bond portfolios makes consumers feel more confident in their wealth. This comfort level often inspires above-average spending.

But when that fattened balance is tied to unrealized gains, you’d best put that credit card back in your wallet. As this week’s trading illustrates, swift gains can quickly revert to losses. The best way to keep your retirement strategy on course is to tie your spending to a fixed budget, not an ever-changing brokerage balance.

While it might feel nice to splurge on a fancy vacation when the S&P 500 is soaring, it will feel doubly bad to stay home watching Netflix every night during a bear market.

Have a Bucket Plan

As someone who follows the market for a living, I have a constant feed of stock prices lighting up my desktop. I am hyper-aware of my investment balances, for better or worse. And while my mood might shift based on an extra bullish day or, as we’ve experienced recently widespread selling, it’s best to keep your spending steady.

Basing your spending or retirement decisions on monthly swings in the stock market is a poor plan. Most financial advisers suggest a few buckets for investments based on spending forecasts. Money is moved from a “most invested” bucket to a “least invested bucket” based on how soon you plan on spending that money.

The most invested bucket likely holds stocks, stock ETFs and mutual funds geared towards capital growth. The less invested buckets hold more cash, bonds, and ETFs and mutual funds focused on income and capital preservation. The long-term holding plan for this bucket allows you to weather market storms.

If your children are toddlers and you’re saving for college, most of this money should be fully invested in growth vehicles. It is frightening and not prudent to dump all your savings into the market in one lump. Adding a fixed dollar amount monthly will automatically help you average into stock prices over time.

The same goes for retirement savings. A young person will likely have most of his savings in stocks and growth vehicles.  However, as the person ages, a portion of those savings will be moved to less risky buckets.

The goal is that as you creep towards retirement, your investment balance will be less volatile. You don’t want to worry that a sum you plan on spending next month suddenly disappeared due to a market sell-off.

 If you’ve slowly crept into bonds and dividend ETFs or mutual funds, your portfolio should generate a decent supply of steady income. More importantly, an even-keeled spending plan will allow you to get a good night’s sleep in all those years before retirement.