the first rule of personal finance

December 1st, 2008

The First Rule Of Personal Finance

It is December, and December means holidays.   Last year the M-Network started their own holiday tradition with The Twelve Days of Christmas – Personal Finance Style.  Taking cues from a popular Christmas carol, we changed it up and each wrote about different aspects of personal finance, following the “12 Days” theme.  I’m kicking off this year’s round of posts today with the first day of Christmas with a personal finance focus.  I’ve decided to share a “golden rule” that I live by, and it isn’t the usual spend less than you earn (although I do believe in that as well).  My first rule of personal finance is:

Failing to plan is planning to fail.

I know that I talk a lot about budgeting on this blog, and that I am a huge advocate and convert to it.  But that isn’t all that I mean.  You don’t have to budget to plan (although budgeting is by definition planning), but not planning at all is a sure-fire way to go astray.  Without a plan, you don’t know where you’re headed, or how to get there.


A financial plan can be as simple as a list of things you’d like to accomplish and ideas on how to achieve each, or as complex as a detailed budget accounting for each dollar that comes into your household each month.  The amount of complexity is up to you.  I know that often I daydream about things I’d like to do in the future – places I’d like to go, improvements I’d like to do to the house, experiences I’d like to share with my family, but without committing pen to paper and figuring out what I really want, dreams get forgotten or pushed aside for the realities of day to day living.


So if you’ve never been a planner, now is a great time to start.  Take out a piece of paper, or open an empty text document on the computer, and make a list of twelve things you’d like to accomplish financially in the next year.  They don’t all have to be earth shattering things – I’ve had goals as simple as remembering to pay a certain bill on time or always having stamps on hand.  Then start making a plan for how to accomplish them.  You might be surprised how much of a difference putting pen to paper (literally or virtually) can make.


Keep up with the twelve days of personal finance by following it from blog to blog over the next two weeks!

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