No Financial Plan is Perfect
It’s easy to make a plan. It’s easy to say, “this is how my life will happen.” It’s not so easy to stick to that plan, especially when life gets in the way. And let’s face it – life is going to happen to you. You can expect a major financial emergency on average every ten years. And you can expect minor financial emergencies and hiccups almost monthly. It’s going to happen.
When I was an operations officer in the Army (yep, that’s me in the picture – a rare fun moment during the war), our team was pretty good at writing and issuing plans in the form of what we called operations orders (OPORD for short). We had a whole system for streamlining the planning process at higher levels for complex operations and missions. One of the things we worked endlessly on was quickly getting the plan out to our commanders in the field so they had time to prepare and execute the plan. Translation: we didn’t have time to waste trying to create the perfect plan, but we still needed to have a good plan.
We knew the reality: as soon as we executed the plan, something would go wrong. No plan is ever good past the point of execution. The enemy out there is never going to do exactly what you think he is, and you can’t predict every maintenance nightmare that may pop up and affect your ability to fight. You can, however, build a simple, flexible plan that allows commanders to adjust on the ground to accomplish the overall mission when things don’t go exactly according to the plan.
Solid but Flexible Financial Plan
The same is true for your financial plan. You can’t predict every little thing life is going to throw at you. But you can be prepared and build flexibility into your plan so you can adjust on the fly instead of getting killed in an ambush. You can set money aside for emergencies and leave it alone so it’s there when you need it. You can start investing early in life so you have money to deal with retirement and health issues later in life. You can start saving for college for the kids so it doesn’t surprise you when they suddenly graduate and decide to go to college. You can save up for a wedding or car replacement or vacation or [insert your goal here]. But be careful here. You may just have to say no to the things you want today so you can be prepared for tomorrow. I know that’s not the American Way anymore but that’s what it takes to win financially.
All of these things I mentioned may or may not happen in your life. But if they do, you’ll be prepared. If they don’t, you’ll have other options. If something else major happens, you may have to change your plan but at least it will be a slight adjustment to the plan rather than a significant emotional event. The point is you can’t go through life without a plan, but you can’t wait for the perfect plan either. Spend a little time on a good, general plan and get going on it so you can tweak it as you go.