What are the Costs of Failing to Plan Financially?
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Failing to plan can result in both emotional and fiscal costs.
“If you fail to plan, you are planning to fail” Benjamin Franklin’s quote applies to many choices we make – including personal finances. If we don’t take his message to heart, then a lack of planning can be costly. There are traditionally two paths one will take when purchasing a large expense. They will either build a plan ahead of time to achieve a financial goal, or—the more popular path—worry about it when the expense arises. It is important to consider the hidden cost when financing a large future expense. NOT FINANCIAL PLANNING AHEAD MAY cost you more than YOU THINK.
Financial Planning Emotional Costs
Financial planning is about being clear where you are going financially, and being confident that you have made the right decisions and have the best strategy in place. Lack of planning often leads to a lack of financial independence. The emotional cost is confidence.
Financial Costs
Financial planning is about increasing your net worth in the most effective way. If you were paddling down the river and could know that a waterfall with a 100-foot drop was ahead, when would you like to know? The sooner you know, the better your chances of saving your life. When it comes to financial planning, the sooner you know what might occur for you financially, the sooner you can make the decisions that will improve the growth or preservation of your net worth.
Much of the stock market news highlights information after the fact, and if we had acted on it before anyone else, it would have resulted in making a lot of money. The same is true for real estate. Millions have been earned by developers who had a vision of what could happen with a piece of real estate they discovered before everyone else. Personal financial planning is about applying the same concept to your own personal wealth planning in the areas of investments, income taxes, insurance, retirement planning, and estate planning.