Why Having A Financial Plan Matters Now More Than Ever
In our culture of 24 hour financial news channels and websites, we are blitzed with news stories and articles which claim to be for our benefit but in substance are truly crafted to provoke clicks and views. Flip or click on any financial news outlet and you are likely to meet numerous flashing red banners declaring “breaking news” and article after article of financial strategies written by content creators who know nothing about your personal financial circumstance- yet bid you to make drastic changes to your investments and finances.
The reason financial planning matters now more than ever is because we find ourselves barraged by impersonal and unsound financial advice, advocating for short-term fixes that don’t really work, now more than any other point in history.
Contradictory to today’s conventional wisdom, the foundation of a strong and successful financial life is not the blind quest for a higher net worth through short-term strategies. The foundation for strong and successful finances is the process of making personalized life decisions with wisdom and purpose, also known as financial planning.
Proverbs 21:5- The plans of the diligent lead to profit as surely as haste leads to poverty.
Almost all financial plans should address long-term investing, retirement planning, budgeting, debt management, and estate planning. But a simplified and biblical way to think about managing finances wisely is through Ron Blue’s Four Principles for Managing Money:
- Spend Less than you earn
- Avoid the use of Debt
- Build Flexibility and Margin into your finances
- Set Long-Term Goals to achieve.
If there is anything certain the Corona Virus has taught us throughout this crisis it’s that the world is uncertain. We’ll never know exactly what lies around the corner economically in the next week, month, year, or decade; but we can control how we manage the resources God has given us to steward and use. Financial Planning and taking a long-term approach with our finances is the cornerstone of wise financial stewardship, despite our culture telling us opposite.
Eric Schrum is an advisor and partner at Schrum Private Wealth Management. Eric contributes for The Faith First Advisor, The Faith Driven Investor, and has a particular interest in helping Christians align their finances with their beliefs through wise financial planning and investing. Investment Advisor Representative of Spire Wealth Management, LLC. Advisory Services offered through Spire Wealth Management, LLC, a Federally Registered Investment Advisor. Securities offered through an affiliate, Spire Securities, LLC. Member FINRA/SIPC.