I am a mediocre planner (I view my Father as the greatest planner), however, knowing that I am not that good at planning gives me a peculiar talent, in that, I can spot (easily) flaws in other folks plans. I think of myself as a “risk editor” for plans.
Let me explain, if a good planner looks at your plan, they will overlay their own fastidiousness onto your plan, and will assume you have “dotted all the I’s and crossed all the T’s”, which is a dangerous assumption for many plans. Most plans I have seen do not get down to most of the gritty details needed to make it an actual plan (e.g. Dates on which you will make deposits, pay bills, what you will do with found money), and that is where most of them fail.
For someone like me, who has failed at planning so many things in my life (not just financial things), I easily see these flaws in other folks’ plans, because I overlay my own shortcomings and just start asking questions about things (in a financial context):
- Did you think about what would happen if you lost your job?
- What if you or your wife had a catastrophic illness next week? How would your plan work?
- Paying off your credit cards is here, but are you going to keep using those credit cards? You don’t seem to mention that in your plan.
- What if interest rates suddenly jumped to 6% in 6 months? Can your plan withstand that kind of stress?
- Are you being overly optimistic with your plans? Few of us plan realizing our own shortcomings.
Most folks really hate when I do this, because they answer me the same way my daughters did when I asked questions like, “Did you pack your runners?”, when going to an out-of-town basketball tourney. The answer is “YES, I DID!” (Read that with a snarky sarcastic tone), and then we get to the tourney, and the shoes (in fact) are still at home.
What Are You Saying?
I am not telling you to find a bad financial planner and use their plan, what I am saying is create a financial plan, and then have someone you trust (or a real financial planner) review it to see if there are risks or details that you have overlooked. Different sets of eyes sometimes can see new things.
Once you have a plan, treat it as a living document, review, revise, and update
Image courtesy of Goldy at FreeDigitalPhotos.net