Banking Law

Twelve Personal Finance Mistakes - Failure to Plan

By Eugene S. Melchionne, Connecticut Consumer Attorne

Are you living from paycheck to paycheck”?  What happened to that grand plan to be a billionaire at age 30?  What happened is that you didn’t plan to make your dream a reality.  Goals don’t just happen, they are reached after detailed planning.  The single largest mistake my clients make is failing to make a plan.

How do you make a plan?  There is no one single way to do it, but every method boils down to setting a goal and figuring out to reach them.  The secret is not to set the goals very high or too far out.  Take a cue from the communists of the old Soviet Union - form a five year plan.  If is difficult at best to say what you are going to be doing 10 or 20 years from now, but no matter what age you are now, you can predict where you want to be in 5 years.

With a five year goal, you can set a plan of how to reach that goal.  If you are just coming out of school into a working life, your goal might be having a job that has a future.  A little bit older and you might be looking at a goal of starting a family or buying your first house.  And if you are in your fifties, you imght want to set a goal of setting yourself up for early retirement.

Once you have your goal, it is easy to break down the steps to reach that goal.  You might not reach your goal within the stated time; maybe it will take you six or seven years to reach it or maybe even ten years.  Stuff happens.  And sometimes, you might reach it in shorter time.  As you reach those early goals, it will get easier for you to continue setting reachable goals.  You will quickly learn that the grand plan isn’t a get rich quick winning lotto ticket.

Full post as published by Debt Law Network on May 27, 2009 (boomark / email).