Personal Finance tips #1: Stick to Your Financial Plan
March 15, 2010 by Victorino
Filed under Financial Planning, Personal Finance, Personal Finance Tips
Every person wants to have a financially stable life. Whether it involves millions of dollars or just a thousand enough to run a simple life, they want to make sure that financial troubles are far away from their lives. One effective solution to avoid financial disasters is to have a personal financial plan. This plan involves assessment of personal financial situation (evaluation of personal financial statements like balance sheet and income statement), setting goals (short term goals and long term goals), creating the plan (formulation of procedures on how to accomplish one’s goals), execution of the plan, and monitoring and reassessment to make sure that the plan is effectively and efficiently heading to its accomplishment.
A financial plan, if properly executed, can help anyone attain short-term and long-term successes. On the contrary, not following it will bring any person into financial tragedies. Creating a simple plan may become simple. However, adhering it may become a different story. That’s why, it is very important to stick to your personal finance plan. But how can we assure ourselves to commit to our plans? The answer lies on one’s self-control and his ability to avoid any distractions in achieving a particular goal. Distractions can be positive or negative distractions. Between the two, positive distractions are the harder to avoid. Why? It’s because they are more attractive than the negative ones. In other words, they are more deceiving than the negative distractions. Logically, when it comes to avoiding things, the more harmful things (negative) are, the easier to avoid. On the other hand, the more enticing things (positive) are, the more difficult they are to evade.
Sometimes, people don’t realize that many pleasing things are already pulling them away from their original plans. Let us consider a person who aims to buy a brand new laptop with complete accessories worth $1,000 from his savings after 3 months. Let us also think that the equipment will be used for his online business. After two months, the person has already saved $700. His goal to purchase the gadget is already near at hand. However, just after a few days, when he was walking at the shopping mall, he saw a beautiful LCD color TV that catches his attention. There was a promotion sale and the price of the TV was netted at $600, sliced by a 20% cash discount. Because of this attractive opportunity, the person could not control his self and bought the home appliance the very next day. After three months, he only saved $450 out of his $1,000 goal. He has purchased a TV but failed to buy the laptop he needs to run his online business that will give him online income opportunities.
The example above can happen to anyone of us. To avoid it, we need to stick to our game plan to win our goals. We need to have a strong self control and resistance to any distractions that will ruin our plans – whether they are negative or positive distractions. Finally, we should always remember that like in boxing, if you will not focus to your game plan – you can be knocked out.
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It can be very hard to stick to your plans at times but it’s gonna be worth it. Thanks for sharing this post. If you get the chance, feel free to visit my site for helpful finance tips.
Hi Joel,
Welcome and thanks for visiting. You got a good domain and weblog, I just visited it. Keep it up, I know it be more successful. Yes your right, sticking to our financial plan is really worth it if it can be done.