Should You Even Have a Financial Plan?

The concept of what is a Financial Plan is something I began to re-evaluate a few years ago, as life has a way of not going to plan – either because things don’t work out the way you anticipated, or because something better comes along that you couldn’t anticipate.

Life has given me so many switches in direction, that I’ve become accustomed to ambiguity and having to be flexible.  The Pandemic has really exacerbated this too.

So to me, having a Financial Plan is about enabling Life.  Understanding WHY you want money, and WHAT lifestyle you want is very important.  It gives you direction and a filter to help you make financial decisions (while your Values are your guiding compass).

The Plan part builds out of that - so yes, I do still think you should have a Financial Plan. Consciously managing your money and having a “direction” for your life provides you with the freedom to choose – change direction, follow your intended path, or take a break from your plan and go and have some fun. It then becomes your CHOICE, rather than being chained to a decision and plan that you made years ago.

As an example, a few years ago, a colleague decided to follow a girl to South America, and ended up having a “career break” for 12 months and had a ball!  This was not in his “plan”, but gave him an incredible life experience.  Upon his return he made some other pretty big life changes, and wouldn’t have done any of this if he’d stuck to his original plan.

If you want to remain open to life and its possibilities, and being able to make quick changes, then I’d suggest keeping your debt levels low, and having more liquid assets.

If owning a big, fancy house, and having the best car are more your priorities, perhaps consider waiting a few more years before buying them – give you more time to get your finances together.

A Financial Plan is about having the freedom to make Conscious Choices, not to set something in motion and never change it.

When I first began planning my finances I was single, and was free to travel anywhere on a whim (which I did quite a few times).  Since then I’ve been married and had my daughter, which has changed my priorities quite a bit.  

I have still travelled since my daughter came along, but now my focus is on building my financial reserves, while also building a sizeable nest egg for my daughter, so when she’s old enough she has the money to make choices, rather than being forced down a certain path.

So, while having a plan is important, it’s also vital to re-evaluate and take your “plan” with you on your life’s journey.