The Power of a One Page Financial Plan

Posted on
July 18, 2018

Do you think it’s realistic to get you and your family’s entire financial plan written down onto a single page?

That’s right. One page.

I, for one, believe it’s 100% realistic and I would love to share with you as to why I believe a one page financial plan is the way to go, and why it’s so powerful.

If you have had the experience of working with a financial planner, it’s possible that you may have experienced something like this…

You meet with a planner, they collect a wack load of data from you and that process is generally followed by another meeting where you go through “the plan”.

What does that plan look like? Well it’s about 2 inches thick, and it would work as an excellent door stop. It’s full of facts, but also many assumptions. It has fancy charts and graphs and gives you the exact road map of where you’re going to be in 30 years from now.

Wait what, 30 years?! I’ve barely been alive for 30 years! Can you really tell me where I’m going to be in life when I’m 60?

Life can change quickly… but you already know this. This is why it’s likely you would trust me when I say that most of these “plans” end up in a filing cabinet or on a bookshelf and collect dust… (or maybe they are actually used as a doorstop, who knows).

Now, I didn’t come up with the idea of a one page financial plan. Earlier this year I did some training with Carl Richards. He is a Certified Financial Planner, frequent writer in the NY Times and the author of The One Page Financial Plan.

Since my training with Carl, my process with my clients has taken a 180 degree turn. (Thank you Carl!)

The data collection part of the process still takes place, but what has really evolved is the discovery process.

My clients are often taken aback when the first question out of my mouth isn’t asking about what their current assets and liabilities are… So what is my first question then?

What is most important about money to you?

Think about that for a minute… there is no rush. What is most important about money to you?

It’s not a question that can be taken lightly or skimmed over too quickly. This is an important question and something you can really dive deep into and explore.

This is just the first question of a series of really great questions, and with all of this great information we can put together a beautiful one page financial plan.

I know what you’re thinking - What is on this “one page” and what about all those charts and graphs, aren't those important?

“The ability to simplify means to eliminate the unnecessary so that the necessary may speak” - Hans Hofmann

This one page plan is essentially a document that highlights what is truly important to you about money and is a reflection of your core values around money and life. It’s also a short summary of where you want to be and what you want to accomplish over the next 3 to 5 years.

As for the graphs and their projections, it’s important to review them at certain times and when major life events occur. These projections and assumptions are very fluid and ever changing - just like life, and it’s a big reason why they stay out of the plan!

Because that one page financial plan, at its core, is rarely going to change.

Whenever that next big decision in life comes up that is tied to money (which is often very emotionally charged, such as buying a new vehicle or a boat, or maybe it’s your cousin Joey giving you a great “stock tip”), you can reflect back to your one page financial plan.

Ask yourself this…

Is this decision in line with what is most important about money to me? Is this decision going to add value to my life? Is it going to help me reach the goals I’ve set out sooner, or push them out further?

This is where you gain clarity and make smart decisions with your money.

Posted on
July 18, 2018
Behavioural Finance