The One Page Financial Plan

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Dr. Phil + Suze Orman + Oprah = The One Page Financial Plan

Values Based Money Advice

Carl Richards hits the nail on the head when he begins with The Most Important Important Money Question, “Why?”

He’s touching on the issue that most people never explore; What are you going to do with your money?

This leads into your personal values. And that’s where the Dr. Phil similarity lies. Richards recommends drilling down, really deep in terms of what’s important to you. And he means “you”, not your neighbors, not the Jones’ or anyone else.  He’s very firm about designing a plan that encompasses the things you think are important.

I was taken aback when he talked about his own financial troubles, and how he bought too much house leading to financial woes and a subsequent short sale. This personal disclosure gives him an extra dose of empathy and understanding for those who’ve made the wrong financial decisions. Although spending on what matters to you most, won’t prevent financial troubles, it will certainly flip your perspective away from buying what’s important to your neighbors to spending on things that are important to you.

One Page Financial Plan Review-by Carl Richards

Values based saving and spending means figuring out what you want and then aligning your spending with your goals.

Planning or Guesstimating Your Money Goals

Although the Suze Orman comparison might be a bit of a stretch, Richards does get into some “sensible money strategies” as does Orman. The One Page Financial Plan uses the values exercises to inform your financial planning. After you clarify what’s really important to you, next comes the planning. But, The One Page Financial Plan does not require you to be perfect, in fact he takes a realistic approach and suggests you “guess” when making plans for the future. Do you really know what the future holds? Of course not, so just start with some ideas about how you want to spend your money. Do you want to build a savings fund for Brittany to go to the state university? Or is owning a second home your dream?

Next, put an approximate time frame on the goal. Finally, he reminds us that no one can predict the future, so you may as well be flexible. Richards suggests adding a price tag to your potential goals. You may be surprised to find that certain goals are more affordable than you expected. One family wanted to take off 6 months, home school, and travel around the country with the kids. When they worked out the numbers, they realized this dream could become a reality. 

As a recovering ‘perfectionist’, I like the good-enough mentality. How many of times have you heard the adage to “plan for the future” as if you know exactly what’s going to happen? It’s refreshing to state at the outset that all of our future goals and ideas are more like educated guesses, than real eventualities.

Here Comes Oprah

Now, with all these comparisons, you might think I’m taking Richards’ approach lightly, but to the contrary, I like Dr. Phil, Suze Orman, and Oprah and so do millions of others around the world. These comparisons illustrate the comprehensive tone of the book.

The guessing and planning section offer some foundational insights and suggestions:

1. Sometimes we’ll be disappointed.

2. Let go of expectations about the future.

3. Let go of outcomes we can’t control.

4. Let go of worry.

5. Let go of our need to measure ourselves against others.

6. Things might not be as bad as you think.

If we could all follow those suggestions, we’d be a lot happier, regardless of our money situation. But, it’s helpful to pair those affirmations with a real plan.

Spending + Saving + Investing

Tools and strategies round out the last sections of the book. 

Budgeting = Awareness 

According to Richards, to budget is to come face to face with how you’re really spending (not how you think you’re spending). You all know you need to budget, the book makes a case for budgeting as empowerment. By tweaking your viewpoint a bit, you might be able to actually see budgeting as enjoyable.

The strategies and suggestions for spending, saving, and investing focus on the individual and stress that there’s no one right financial planning answer for all. 

The actual “money” section of the book is a bit light with the investing part quite cursory. In spite of these shortcomings, any work which will get you really thinking about how you spend your hard earned dollars and why, is worth a read. 

The Takeaway

The illustrations were a delightful surprise. Richards is a well-know sketch artist and uses his craft to illustrate the other concepts in his book. The artwork is simple and powerful and really gets into the nitty gritty of financial reality. My favorite napkin sketch is entitled “Future Financial Needs”. The image on the left is a tiny circle with the word ‘perception’ underneath. On the right is a large circle above the word ‘reality’. The art powerfully shows how so many people think their future financial needs are quite small, when in reality, they are the oppposite-enormous.

Pick up a copy of The One Page Financial Plan and get your financial head on straight.

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