When it comes to finances, things will go wrong sometimes. No matter how much we plan and think positively about the future, sometimes things are outside our ability to do anything about it. Jobs are lost, medical emergencies happen, and it can seem like we’re always running uphill both ways as we try to dig our way out of the problem.
Here are some common reasons why financial plans fail.
We Don’t Know What We Don’t Know
Sometimes, a plan fails because we didn’t do enough research or get enough education.
Sometimes a situation is so complicated that only an expert can understand the right questions to ask. If we have not gotten any expert help, we may not even know how to ask for what we need or want in order to do the research.
More often than not, it comes down to a lack of prospective. When making decisions, we rely on the info we have at hand at that moment in time. Sometimes, the info we have isn’t accurate or is insufficient to make the best decision.
Expecting Too Much from Too Little
The plain fact is, when we aren’t making enough money to pay for the basics, we won’t really be able to plan your financial future because we can’t even feed ourselves, put a roof over our own head, or take care of basic needs.
We need to tackle first how we’ll make money before we concern ourselves with what we’ll do with it.
Spending Too Much
If we aren’t paying attention to your expenditures according to your income, we may be spending too much. What is a fair amount to spend on rent at our income level? Is that realistic? Do we need to make more income, or can we find something in that budget?
Not Focusing on the Long-Term
Some objectives must be long-term because it’s the only way to properly save enough for them. Compounding interest will save us, but without the long term to build those savings, we cannot achieve it.
Putting It Off for Later
It’s that time thing again. Our senior years are much closer than we think they are. When we live your life, it can seem as if time has no real meaning, but when we look back, we can see how fast it was. A good financial plan has to be implemented now and not later.
Not Monitoring Our Finances Regularly
Time can get away from us as we raise kids, work jobs, or take care of our parents or a sick pet. Life can pass by in years rather than days in the blink of an eye. It’s imperative that no matter what is happening in life, we make it a priority to monitor our finances.
Lacking SMART Goals
When setting- up goals and objectives, we need to use the SMART goal-setting technique. This means every goal needs to be specific, measurable, attainable, realistic, and time-bound.
Without it, it’s unlikely we’ll ever achieve our goals.
Final Word
The main thing to know if we want to be successful with your financial planning is to ensure it matches our personality, our desires, and our goals, along with the realistic understanding of how much money it takes to do what we want to do.
What other people want is what they want. What you want is what’s important. Know what you want and know how you’re going to get it, and you will be successful if you follow your plan.
The Money Savvy Blog 