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Many people never even consider starting a Financial Plan or budget because they are afraid they will have to "give up" something. To some, a financial plan is like a diet that may force them to forgo a favourite treat. Planning is well known as a key to success and all successful people plan.
Myth #1: You have to suffer to use a Financial plan.
The truth is you are following a financial plan whether or not you have consciously implemented one. Unfortunately, the "plan" you end up with by doing nothing is almost certainly an endless cycle of reactions, as opposed to a dynamic, proactive strategy. A reactive mode contains the double whammy of the anxiety of wondering when the money will run out, and then feeling deprived when it does. A plan will actually reduce your aggravations.
An Analogy
A more accurate analogy of planning is a cluttered hall closet. You know the one - a closet you are afraid to open in case you are hit on the head by a cascade of falling junk. The one everyone puts things into, but never takes anything out of. Picture that closet in your mind for a moment. Now imagine taking everything out and laying it all on the floor where you can see it and study it. Then, give the closet a thorough cleaning, and perhaps install some new shelves or racks inside. Finally put everything back in an organised, neat manner. Do you know what? You will have more storage room than when you started - and you did not get rid of anything!
However, it might be that when you have all the junk on the floor, you decide you can probably do without the muddy pair of old shoes, or the broken tennis racket or the jigsaw puzzle with half the pieces missing. If you get rid of some items, you have even more room in the closet.
Organization Will Yield Huge Benefits
A financial plan works the same way. The very act of organising your finances can provide extra money! During the organisation process, you might discover some expenses you want to eliminate, or some smarter ways of handling payments. What’s more, it costs nothing to draw up a plan. Go on, don’t be afraid, get started. What have you got to lose?
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