The One-Page Financial Plan by Carl Richards [Review]

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Overview

one page financial plan reviewConfused by all of the information online that you end up scared you’ll do the wrong thing when it comes to your finances? Carl Richards felt exactly the same way after speaking to many of his clients. He wanted to give people a simpler and more personalized way to look at their finances. This is personal finance after all.

He explains: “Whenever I tell people about my job as a financial advisor, the conversation inevitably turns to how hopeless they feel when it comes to dealing with money. More than once, they’ve begged, ‘Just tell me what to do.'”

 

Who is Carl Richards?

carl richards financial plannerCarl is a CERTIFIED FINANCIAL PLANNER (™), the creator of the weekly “Sketch Guy” column for the New York Times, a columnist for Morningstar Advisor, and an all-around nice guy. He’s been featured on major sites like Oprah & Forbes, and is also keynoting the Financial Blogger’s Conference this year.

Carl is also the author of Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money.

I had the pleasure of interviewing Carl recently, and you can read the entire interview here.

Summary

Carl Richards is one of those people who can sit down and write down everything most of us know, but can’t properly express into words. He pulls out emotions and feelings in a way that is so hard to put onto paper.

He is also the Sketch Guy columnist, in which he visually depicts some of the more difficult financial ideas onto a paper napkin. Throughout the book, he includes some of these great illustrations, that really put financial planning into perspective in an easily relatable way.

 

The point that got me hooked:

unclear goals leads to analysis paralysis

While talking about why people don’t do much in terms of their financial situation he says, “they’re often paralyzed by the fear of making the wrong decision.”

He goes on to explain that, “it’s not just fear of making a mistake that holds us back from taking action – it’s also the mistakes we’ve already made that we won’t want to own up to.”

BINGO. You hit the nail on the head here, Carl. This was definitely the case in my situation. I had put myself into massive amounts of student debt, and subconsciously wouldn’t allow myself to think about it or own up to it. I can’t imagine it’s much different for most people.

Throughout the book Carl talks about finding what’s most important to you and basing your financial goals off of that.

He compares the typical financial planning process to a less-than-ideal doctor’s visit.

Say you went to see a doctor because you didn’t feel good. He/she walks into the room and without doing a detailed assessment on you, says “Oh, you must have the flu that’s been going around this week, everyone has it! Here is a prescription for an antibiotic that will cure you.”

You’d probably leave feeling like you weren’t properly listened to. Or that this person thinks you’re just like everyone else, when in fact, you might have a completely different problem that they failed to recognize because they didn’t take the time to learn your situation.

That is how most people look at financial planning. They either think they are just like everyone else and need to follow the latest financial ideas, or they let someone else tell them how to plan for the future without giving them the entire story.

Don’t do either of those things. Make sure you are painting the whole picture if you let someone help you with this, and be honest with yourself when it comes to your situation.

Remember, this is personal finance.

 

Some of my favorite quotes and illustrations from the book:

Carl's one page financial plan

“We don’t often think that money spent on a new car can be directly translated into time not spent with our kids – but when we forget the make room for the intangible things in our financial planning, we pay the price.”

 

“No. Really. I mean it. Stop giving me options I’m not qualified to evaluate. Please. I’m begging you….Just tell me what to do.”

 

budgeting equals awareness

 

“By focusing only on what I could control, and letting go of the rest, everything changed.

 

reaching financial goals faster

 

chance of doing something stupid just this once“You’ll need to behave over and over again. You’ll have to do it in the face of unexpected circumstances. You’ll have to do it when everyone around you seems to have lost their minds, and they’re trying to tell you that “this time is different.” And you’ll have to do it even though it seems like you’ll be missing the deal of a lifetime if you don’t act now.”

 

 

time spent worrying about money

 

“Ignoring the dam that is about to burst won’t fix things. The sooner you start the work of repairing it, the better off you’ll be.”

 

 

“The best financial plan has everything to do with what’s most important to you.”

 

“Scrap striving for perfection and instead commit to a process of guessing and making adjustments when things go off track.”

 

future financial needs perception“I’ve found it’s best to create a financial plan that takes uncertainty as a given – that sets you up to make adjustments as quickly and painlessly as possible so your disappointments won’t spiral into disasters.”

 

“It’s about being really honest about where you want to go, getting really clear about where you are now, and then making your best guesses about how to narrow the gap between the two.”

 

This is some pretty powerful stuff, huh? As you can tell this book is more about getting people to see their mistakes as things we can learn from. There is not a specific plan here that is discussed, and for good reason.

Everyone is different, so Carl couldn’t really include a “foolproof” plan because, well, it doesn’t exist. There is a ton of great information about how to go about figuring out your own plan, but don’t expect a step by step manual here – it doesn’t exist.

If you’d like a copy of The One-Page Financial Plan, you can purchase a copy from Amazon here.

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Chenell

I am Chenell Tull and so far, I've had a pretty rough time with my student loan debt. Recently, I've figured out a more productive "get out of debt" plan and the goal is to pay off over $60k in just 36 months. If you want to learn more, subscribe to the mailing list and get FREE updates on my successes and failures on this journey out of debt. 

  • Adi

    Looks like an interesting book Chenell, I’ll have to check it out. One I’m just finishing that you may be interested in is called Scarcity. It talks about things like our decision making (especially financial) when we’re under pressure.

    • Thanks, Adi. I just saved it to my “to read” list. Sounds like an interesting read for sure!

  • dedicate

    The book sounds interesting and I’m sure could help a lot of people. Some very simple charts and diagrams there that I’m sure would resonate with many.

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