As we prepare to celebrate World Financial Planning Day on Oct. 7, maximize this opportunity to get your financial house in order with a financial plan so you can stay above uncertainties.
From the Great Recession to today’s health crisis, we are reminded that there are things that are out of our control. Uncertain times come without an invitation; times that try men’s souls usually appear without advance notice.
How can you be better prepared so these uncertain times don’t destroy your finances? What can you do to build your house on a rock so that when the storm comes, it will still be standing?
Financial Planning and Uncertainties
People without a stable financial plan jump on every movement in the stock market. They buy stocks because everyone is buying and selling them because everyone is selling. Warren Buffett calls it the ”fear-greed” cycle.
People without a financial plan don’t know how to react to uncertainties. Every inversion of the yield curve creates fresh anxiety. They are tossed around like a reed because they don’t have a strong foundation. Such people act on impulse or yield to the crowd mentality. Unfortunately, such people include 72% of Americans. Charles Schwab’s May 2019 Modern Wealth Survey found that only 28% of Americans have a financial plan, while 26% don’t have one at all.
Without a solid financial plan, it is impossible to keep your head up when unemployment, high inflation or a recession hits. It’s difficult for someone with zero emergency funds to handle a job loss or a household with less than $1,000 in savings to endure a recession.
Embracing Financial Planning
Some interesting statistics from the Charles Schwab report show why financial planning is golden:
- People with financial plans are 78% more likely to pay their bills and save every