October 4 – 10, 2010 is financial planning week. According to the Financial Planning Association, at least. And I couldn’t help but wonder: a) how many people are even aware of this, b) if people know what constitutes a financial plan, or c) if they even have a one? Actually, I couldn’t help but wonder how many people are like me: Walking around with all of the elements of a plan, but not an actual document that is the plan.

To explain, it might be helpful to state the six (6) elements of a full financial plan as practiced by most financial planners (the parenthetical comments will be explained):

  • Establish goals (have them written down)
  • Gather data (collect weekly & monthly using Quicken Deluxe)
  • Analyze & evaluate your status (analyze (hmm…); evaluate, yes – as in did I meet my goal?)
  • Develop a plan (for some goals, but not all)
  • Implement your plan (mostly)
  • Monitor your status and re-balance (monthly & yearly)

My performance as benchmarked to this list are the parenthetical statements. As you can see, I don’t completely hit the mark on each step; and, at times, this is frustrating because I feel like I should be better at this – especially given what I do in the world and my goal to “walk the walk.”  When I took a random, unscientific poll to my query, “Do you have a financial plan?,” the responses ranged from “I have a spreadsheet of expenses; I know what amount I want to save; I have a budget.” Each response was followed by, “What do you mean — a plan?”


We may not have a formal plan, but we do have the elements to help us make choices; we do have a semblance of a framework to help us convert the unknown into something tangible; we do have a mechanism for setting policies. So, can we give ourselves credit for the elements? Or, does it only count if you have a document?

I feel the reason some people cringe at the thought of a financial plan is that they don’t realize they have more of a “plan” than they are giving themselves credit for. I wonder if the disconnect between what we “believe” a plan should look like as compared to what we have is one of the reasons “financial planning” as a personal practice tends to fall short. What do you think?

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