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Why You Need A Written Financial Plan

Why You Need A Written Financial Plan

May 11, 2021

Most people have dreams and goals. Maybe they hope to travel to an exotic location. Possibly they want to experience the thrill of learning to paraglide. Perhaps they are looking to finally purchase the fishing boat of their fancy. Sadly, people often don’t know how to transform their dreams into reality. 

Sometimes this is caused by a lack of education or guidance. Commonly, however, failure to arrive at the goals someone makes for themselves is caused by a lack of intentionality. Wishful thinking never got anything done without some careful planning and intentional action behind it.

Let’s take a look at how you can be intentional about your financial dreams by having a real financial plan.

Road Maps

Before the days of smartphones and GPS navigation, if you wanted to arrive at a specific destination, you would need directions for how to get there. The lost art of cartography was used to produce maps for travelers, allowing them to have confidence that they would soon arrive at the desired end goal.

However, perhaps you’ve been in a situation where a map wasn’t available, and you had to rely on verbal instructions. If there were more than a couple of steps to follow, the odds were probably against you arriving safely without stopping to get directions again. A small glitch in your memory could see you completely lost before you figured out the mistake. But if you had written the directions down, you could have avoided this catastrophe.

Having a written financial plan is like having a map for your finances. If you have gotten off track from your goals or financial destination, having a plan to look at is essential to getting back on course. If misplaced priorities are starting to siphon dollars from your budget, having a plan to reference will remind you of what you are willing to make sacrifices for. 

In a way, writing your financial plan is like making a contract for yourself, and making a sure reminder instead of an empty promise.

Make It Real

Anyone can make a goal. But without an actionable plan, it isn’t really going to come to fruition. How many people do you know that said they would lose a bunch of weight starting in January, only to find themselves right where they started months later? 

Turning a goal into a plan isn’t hard to do. Instead of saying generally, “I am going to become a millionaire,” be more specific. “I am going to become a millionaire by saving 10% of my income and reducing my discretionary spending by 50% until I reach my goal.” 

The first step is to make a list of your goals. Where do you want to see yourself in 10 or 20 years? In a bigger house? Retired by age 60? Maybe you want to see your cash stockpile cross a certain benchmark? Once you have this list written out, you can begin to attach a plan to each goal, so that you have actionable steps to make it happen. For example:

  • I will retire at age 60 by contributing the maximum amount to my 401(k).
  • I will eliminate my consumer debts by working 4-6 hours of overtime every week and sticking to a strict budget until finished.
  • I will get to $500k in assets within 10 years by utilizing aggressive investment strategies and maximizing my self-employment income.

When you have plans in writing, you are actually on the path to seeing your goals become a reality.

Getting Help

Perhaps you are struggling to develop strong plans to achieve your goals, or maybe you just want to learn what other options you may have to achieve them more efficiently. Whatever your questions are, the team at 1on1 Financial is equipped and ready to help get your plan on paper and make it a reality. 

To find out more, give us a call today at 909-981-1720. Or, if you prefer, simply click here to schedule a free 15-minute introductory phone call!

About 1on1 Financial

1on1 Financial is an independent financial advisory firm specializing in guiding working and retired professionals, executives, and business owners along the path to financial well-being. Founded in 1997, we use a team approach to help our clients accumulate wealth, generate income, preserve their life savings, and strategically plan for the distribution of their estate. With more than 50 years of combined experience in the financial services industry, we remain true to our fundamental mission: to provide personalized guidance, treatment, care, and service so our clients can gain control of their future and feel confident in their financial life.