Continuing with my
Maybe it is time to start that financial plan for the coming year.
Steps for Real Financial Planning
If you were good enough that you made a plan for last year, your life would be even easier:
- Pull out last year’s financial plan
- Examine whether you succeeded or not (don’t be too rough on yourself, this is a journey, not a destination).
- If you had areas where things didn’t work out as you’d hoped (e.g. you paid too much at Christmas), make a list (hopefully a short one) of them.
- Pat yourself on the back, buy yourself a gift, go out for a nice dinner, reward yourself in some fashion, you tried to follow a financial plan, good for you. You are one of the 5% of people who tried (ok maybe 10%). (I disagree with my old self, ignore this step!)
- Start your plan for next year, which is easy because you have last year’s plan to work from, and your list of stuff to “tweak”.
Only 3 Plans Total ?
My Father, whose job it was to plan things for a large company (no, it’s not hereditary, I stink at planning), told me a valuable piece of advice: Once you start planning things, you end up having three plans:
- Last year’s plan (which you use to learn from what did and didn’t work)
- This year’s plan (the one you are working on now)
- Next year’s plan (which you think about and maybe write some notes for)
That’s it. Sometimes you can cheat and only have two plans because Next Year’s goal might end up being exactly (or remarkably similar to) your current plan or last year’s plan.
Just Do it !
My advice, start planning, don’t get bogged down, write a plan you think you can live with Financially, and figure out a way to track it and figure out if you are succeeding or not, and there you have it. More ideas later on what you should plan, but plan you should.
Planning is not as complicated as you think. Just use a system that works for you.