Sunday Thought 27

Planning is a huge part of finances. Unfortunately, I think most of us do to little of it. I see too many people making decisions based on what other people are doing (the flavor of the week mentality), or make decisions on the spur of the moment (but it’s on sale!).

Just as you would not want to build a house without a blueprint, you do not want to make financial decisions without a financial blueprint.

Planning should be done with several time horizons–short term (6-12 months), middle term (1-5 years), and long term. Your long term goals should influence your middle term, which in turn influence your short term plans. These plans do not have to be rigid, there is room for flexibility based upon changing circumstances. But to fail to plan is to plan to fail.

During an economic downturn, the best time to plan was yesterday. But today is not to late. Take some time and think through your goals (what you want and what you desire-keeping the first primary). Where do you want to be in 10, 2o, or 30 years? What can you do in the next 5 years to help you get part way there? What can you do in the next year to begin the journey? Once you know what you want (which can often be the hardest part), then write it down and break the goal into steps (like paying off debt, saving x amount, etc.).

Although circumstances and unforeseen events can modify or change our plans, the discipline of planning will help you now and in the days ahead.

Which one of you, when he wants to build a tower, does not first sit down and calculate the cost, to see if he has enough to complete it? Otherwise, when he has laid a foundation, and is not able to finish, all who observe it begin to ridicule him, saying, ‘This man began to build and was not able to finish.’” (Bible, Luke 14:28-30)

The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty. (Bible, Proverbs 21:5)