Financial Failure is a Product of Failing to Plan



Nobody sets out with the goal of making a financial train wreck out of their lives. Most of us, especially when we’re young and naïve, envision a much brighter future for ourselves. As life goes on, we learn a few things. Among them is the fact that a bright financial future doesn’t just happen on its own. We need to make it happen.

That starts with planning. Whether you’re trying to figure out how to afford a better vacation, how to ensure that you can retire carefully, how to save for your kids’ education, or just how to have a little money left at the end of the month, you need a plan.

In a recent article, Fox Business listed thirteen of the biggest money mistakes. Not having a plan for your finances was one of them. Four of the others also related to not having a financial plan in place for such things as:

  • Your monthly budget
  • Repayment of student loans
  • Getting out of debt
  • Retirement

The first step in accomplishing anything meaningful is to develop a plan. When it comes to family budgeting, that means getting all of the financial decision makers together and discussing, line by line, how you can best use your resources to accomplish your family’s goals. Once you have some concrete goals, the next-and most important-step is to line your financial behavior up with those goals.

Think about it. How much money do you spend on accident over the course of a typical week? We’re talking about a dollar here or five dollars there for things that aren’t penciled in to your budget. You know, emotional, spontaneous purchases. If you add those expenditures up over time, they really make a difference.

That’s not to say that you can’t get ahead of the game unless you never make a spontaneous purchase. Set each family member an allowance within your budget and try to keep unplanned purchases within that amount. Spontaneity’s great, but when it comes to your budget, your spontaneity should be pre-planned.

Many people plan to save, but never manage to get around to it. Why do you think that happens?

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