So, why do we plan?

Have you ever wondered why we spend so much time planning, even when we know that life rarely goes according to plan? It’s a curious thought, especially when it comes to financial planning. Carl Richards beautifully encapsulates this paradox: "In fact, the only thing we know for sure about any good financial plan the moment we finish designing it is that it's wrong. We just don't know exactly how… yet."

This might sound disheartening at first, but it’s a profound truth that holds a valuable lesson. To explore this further, Carl spoke with several pilots, posing two questions. First, “Do you prepare a flight plan for every single flight?” The answer was always a resounding “Yes.” The second question, “How often does the flight go exactly as you planned?” The response, invariably, was “Never.” 

Despite knowing that their plans would change, they still took the time to prepare meticulously. So, why do we plan?

The answer lies not in the accuracy of the plan, but in the process and the mindset it fosters. Planning, especially in the context of financial planning, is less about predicting the future with perfect accuracy and more about preparing ourselves to adapt and respond effectively to whatever comes our way.

Think of financial planning as setting a course for your life’s journey. Without a plan, you’re adrift on the winds of change, reacting to changing conditions rather than steering towards your desired destination. With a plan, you have a direction, a purpose, and a set of guidelines that help you make informed decisions, even when the unexpected happens.

Consider this: a pilot’s flight plan includes not just the intended route, but also contingency plans for various scenarios—weather changes, technical issues, or unexpected detours. Similarly, a good financial plan is flexible and resilient. It takes into account your goals, resources, and potential obstacles, and it provides a framework for making adjustments as needed.

When we create a financial plan, we acknowledge that life is unpredictable. We prepare for the known variables and set ourselves up to handle the unknowns. This proactive approach empowers us to stay focused on our long-term goals, even as we navigate the twists and turns that life inevitably throws our way.

Moreover, the act of planning itself has intrinsic value. It forces us to think critically about our priorities, define our goals, and identify the steps we need to take to achieve them. It encourages us to engage in meaningful conversations with our loved ones about our hopes and dreams, fostering deeper understanding and alignment.

So, why do we plan, knowing that our plans will inevitably change? Because the process of planning is about much more than the final document. It’s about preparing ourselves to manage uncertainty with clarity and purpose. It’s about building a strong foundation that can support us through the ups and downs of life. And most importantly, it’s about empowering ourselves to live intentionally and to pursue our dreams with confidence.