Imagine you got angry at home and you decide to meet your friends at the tennis court to let out some steam. You reach for the car keys, get in the car and start the car. The problem is you do not know how to drive and you do not have directions to where you are going.
That is what not having a financial plan looks like.
Setting goals is important because it helps you map out a plan. Two emotions drive most of our financial decisions: GREED and FEAR. GREED because we want more or FEAR because we are afraid of losing or missing out. Without a plan, your financial decisions will be based on 1 of those 2 emotions. Because we want our financial decisions to be well thought out and not based on emotions, we need a financial plan.
A financial plan keeps you focused. Setting goals helps fuel your ambition. When you write down your goals, it keeps you accountable and inspires you to aim for those things you never thought possible.
Your financial plan propels you forward. There are days when you will not feel like working on your goals, or your focus starts to shift. A plan can act as a visual reminder to keep you pushing forward and serve as motivation on those days.
It converts your dreams into reality. Turns large dreams into smaller more achievable stepping stones. This is because it helps you develop actionable steps you need to take to make your dreams come true.
These are 4 of the main reasons why you should get a financial plan before engaging in any financial undertaking.