7 reasons why people put off financial planningSeptember 23rd, 2013 by Dan Woodruff
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We all know we should be working hard to plan our financial security, right? So why don’t people put this knowledge into action on a regular basis, since we know that delay probably means you are less likely to achieve your goals. This article examines the 7 main reasons we hear why people put off financial planning. I’m sure none of these reasons apply to you, but just in case, take a good look and see if any apply.
- The 7 reasons why people put off financial planning
- How to begin your own financial plan
The 7 reasons why people put off financial planning
- I don’t know where to look for information
The reality is that all the information you need is already available to you. Think about all the sources of financial information you could easily consult: books, websites, blogs, newspapers, videos, podcasts etc. You just need to find the trustworthy sources and start the process of learning for yourself.
- It’s too complicated
If you agree with this one, then you are correct. Financial Planning is too complicated and I believe that most financial institutions and many advisers go out of their way to keep it that way. Many financial products are complicated, and often there are very good reasons for this. But at their core, the fundamental principles of Financial Planning do not need to be complicated. But just because financial planning can be complicated does not mean that you should avoid taking action. Otherwise you are condemning yourself to a harder life than you need to.
- I just want quick results
There is a serious problem with how the media portrays successful people. It has hoodwinked us all into thinking that the solution to our financial woes is some sort of quick fix. The reality is that it is extremely rare for people to get rich quickly. Indeed most people who have ‘made it’ got there extremely slowly. Think about anyone who is famous as a talented star or some sort of business leader. I believe that almost all of them got there through consistent hard work over many, many years or perfecting their craft. They did not give up when doors were slammed in their face, and they learned from these experiences. Unfortunately, the media loves to tell us these people who were extremely lucky because they are out of the ordinary. I am sorry to tell you that you are not going to get lucky and you are not going to win the lottery. If you want results they are going to have to come slowly, and over time.
- I just want someone to tell me what to do
We see this a lot, and we have built our business on the back of this. If you have money to start with then this is probably a viable option. We deal with clients who are capable of working out their own finances. Most of them come to us because they value their time and want to focus on living their dreams. They prefer to pay us to ensure that they remain secure and they avoid any costly mistakes. See our Financial Planning service for more details.The reality is that even our clients cannot abdicate responsibility for understanding how their future is going to be. We embark on regular education of our clients on financial planning principles because they need that understanding to be able to make decisions on their future. If you lack understanding about basic financial principles then you run the risk of being bamboozled into taking action which you would not ordinarily do.
- I can’t afford it
Unfortunately, this is a reality of the modern world. Although we earn more than previous generations, modern life still seems to suck all of our resources and money. The reality is that you can afford it; you just need to understand your priorities. Financial planning is about prioritising your spending and working out how to afford to pay for what is most important to you and your family.I often see people on significant incomes who spend everything (and more) of what they earn. These high expenses leave them with the same limited disposable incomes as those on lower salaries.
- I can’t see past the short-term
This is a genuine difficulty for many people. It is hard to think past your immediate life, especially 20 or 30 years into the future. Financial planning is about time travel – we want you to visualise how your life should be in the future and build a plan backwards from there to create a plan of action to make that dream a reality.You are constantly bombarded with advertising messages of how to make your life better now. Financial Planning is all about delayed gratification, which can be difficult with the pressures of life. However, if you are concerned about leading a secure and fulfilling life then you need to think about the long-term as well as the short-term.
- I can’t trust financial institutions
There is an understandable cynicism with how financial crises have undermined trust in financial services. Of course, this is completely valid, since financial institutions, particularly the banks, put short-term profits above all else. In some ways our financial system is fundamentally flawed on a larger level, but I do not want this hold you back in your own planning. You owe it to yourself and your family to live the fullest life you can. Financial Planning will help you to do that, so you need to understand the issues which are most relevant to you and focus on these. This knowledge will enable you to manage the manipulations and pressures of financial institutions. Ultimately, this can help you to get to your goals faster, unencumbered by the marketing fluff. Just trust in your own financial decisions.
How to start your own financial plan
If you want to get over some of these reasons not to take action in your finances, then the starting point is to create your own financial plan. We have created a free 24-page guide to creating your own financial plan. Just complete the form below to get your own copy sent to your email.
What do your think?
We’d love to hear your opinion or any other reasons you can think of. Just fill out a comment below, or contact us.