Simple Money: A No-Nonsense Guide to Personal Finance - Tim Maurer (2016)

Part V. PLANNING FOR ACTION

Chapter 21. SIMPLICITY: The One-Page Financial Plan

WHY do I need to read this chapter?

Hopefully, our journey through and past complexity has brought you to a place where some very important decisions have become clearer, simpler. In this chapter, I offer a strategy that will help ensure this is the case.

A Sharpie and Some Card Stock

I have seen—heck, I’ve created—financial plans more than a hundred pages long. It was a mistake, and if one of those plans was yours, I apologize.

My friend, colleague, and New York Times contributor, Carl Richards, has helped me fully appreciate that financial planning is a process, not a product. Hitting a client with everything at once can be counterproductive for several reasons, but primarily because it’s overwhelming. We wilt under the pressure and more often accomplish nothing than we do everything.

Richards developed a solution that sprang from his own family’s financial awareness—the One-Page Financial Plan, now a book of the same name. Carl and his wife sat down with a Sharpie and a single page of card stock, forcing an element of brevity.

At the top of the one-pager, they wrote down a statement of their values followed by three goals—only three. They limited themselves to action required to work toward those goals, right now. That was it.

Pulling It All Together

I wholeheartedly endorse this strategy and offer a one-page Simple Money method. At the top of a sheet of paper, write “One-Page Financial Plan.” Then turn it over and use the back as a worksheet:

1. Compile your Insights and Actions. The wisdom of the one-page plan is that you can’t do it all at once. Financial planning is a perpetual process, not a one-time exercise. But at the same time, creating a receptacle for information we want to remember frees us to use our brain space for other pursuits (and thereby reduces our stress). Hopefully you’ve been aggregating your Insights and Actions from Simple Money in the online tool available at www.simplemoney.net/tools or in your own journal. If not, take a few moments to compile the notes and highlights now, just to be sure nothing slips through the cracks.

2. Then, on the other side of that sheet of paper, draft your one-page financial plan. At the top, list the limited number of priorities in life that we worked on in chapter 2. Follow that with the self-selected, authentic, and others-oriented goals we generated in chapter 3. Finally, list only a handful of the next actions you intend to take at this time to work toward those goals. (See the example below and use it as a template if you’re inclined.)

Your one-page plan is a living, breathing document to be revisited at least annually, preferably in a comfortable environment. It only expects of you what you can reasonably do now. If this book has revealed a number of actions you’d like to take, please remember that you have only so much time and you can stretch your dollars only so far. If you need help prioritizing your next actions, revisit chapter 19, “The Top 10: Your Next Dollar’s Home.”

I do believe that, by dedicating yourself to the guidance in Simple Money, you can dramatically improve your financial standing. And I hope you do. But most importantly, I pray you see money as it really is: a simple tool that can be used to navigate life’s complexity on your path to Enough.