Jan. 15, 2018 // 6 min read
“If you fail to plan, you are planning to fail” –Benjamin Franklin.
Look, our boy Benny Franklin was brilliant, it’s why they put him on the $100 bill. If you don’t want to take his advice, I don’t know what to tell you. Here’s the deal, great athletic teams go into each game with a plan. That plan takes into consideration the team’s strengths and weaknesses relative to their opponent. This is exactly what you do when you plan out your finances. Your financial game plan must leverage your strengths and also recognize your weaknesses. Who is your opponent? Life. Life will try to knock you out, but a good game plan will help you come out victorious in the end.
Putting together a financial plan is not difficult, but it does take time and you do have to use the gray matter between your ears. Stop looking for short cuts and quick fixes. They don’t exist. A plan basically outlines your income and your expenditures for a given month and is designed to help you achieve your goals. But this is where people struggle to put together a plan. “Why would I plan for 5, 10, 20 years from now when I can live life today? YOLO! (you only live once)” If this is what you think, you need to get your act together. Having a plan doesn’t mean you don’t live in the moment, it means you live in the moment and that you can also live it up in the future.
A sound financial plan is all about balance. Balancing your past (debts), present, and future. Unfortunately, we tend to select one of these time frames to dominate our financial picture, and therefore the type of life we live. Whether it be living on “rice and beans” to pay off your past, being overly consumed with the present that you don’t worry about your mounting debts or your future, or you are so concerned about the future that you fail to live in the present. A great financial plan is balanced and is designed to help you live a meaningful and purposeful life.
Putting together a plan is great and may look easy on paper, but the real test is executing the plan and putting it into action. This is where the game is either won or lost. Executing the plan requires discipline and commitment. You have to be focused on the task at hand and be willing to do whatever it takes to ensure you execute the plan.
The execution phase is the most difficult part of the financial process because it requires a whole new level of mental power. You have to be willing to run through a brick wall to make sure you stick to the plan, but most of us aren’t willing to make that type of commitment. When we get tempted to give up on the plan we too easily give in. In order to execute the plan, you have to be diligent in monitoring your expenditures relative to your plan and learn how to make critical decisions. Planning is worthless unless you can actually execute accordingly.
Executing the plan flawlessly would be ideal, but life happens. Therefore, the best plans are flexible. When things don’t play out exactly as planned (because they won’t) you have to be able to adjust. Making adjustments doesn’t necessarily mean your plan sucked, it simply means life threw you a curve ball and you have to make some adjustment to knock it out of the park. You don’t abandon your plan altogether, but rather you look at areas of opportunity and you leverage those to ensure the plan continues to move you towards accomplishing your goals. Making adjustments to your financial plan requires some strategic thinking and will require you to take some time to properly adjust your plan. The way you adjust to life circumstances and the “unexpected” can make the difference between winning or losing the game.
Reflecting on how you performed relative to the plan is critical. We get so caught up in the “busyness” of life we often fail to look back and reflect on what actually took place and learn from our experiences. When it comes to having a financial plan, it is critical that you periodically reflect on how you did in relation to the plan. Here are some reflection questions you can ask yourself at the end of each week and also at the end of the month:
What went well?
What could you have done better?
What adjustments need to be made to your plan?
What will you do differently next week/month to help you stick to the plan?
Plan, execute, adjust, reflect is an iterative process that must be done each month. If you think putting together a financial plan is a stagnant exercise that is dull and boring, you simply aren’t doing it right. Look at this process as how you are going to take on life. It’s your road map and game plan outlining how to use financial resources to live a purposeful and meaningful life. Stop sitting idly by hoping that one day things will just fall into place. Take control of your situation, put together a plan, execute with laser like focus, make adjustments when necessary, and take time to reflect in order to continuously improve your situation each and every month.
So, there you have it. If you take the time and have the discipline to plan, execute, adjust, reflect, and repeat those steps each month, 2018 will likely be your best financial year to date. The easiest way to follow these steps is by using the Koach web app. Once you sign up you will have unlimited access to our “Financial Fundamentals” class where you will learn how to put together a solid financial plan! The time is now. Make it happen!