Carl Richards’ book The One-Page Financial Plan has been out for a little over a year so this isn’t exactly a fresh review. It’s a very quick and easy read, punctuated with Carl’s simple but illuminating sketches.
I want to both sing the praises of this book and damn it, sometimes for the same parts.
The part I loved is the philosophy towards planning, which is to seek a balance between mapping the future out in great detail (impossible as the future is inherently uncertain) and just living for today and playing it by ear. Carl tells us to just make a guess about where we’d like to go in the future. “Don’t be committed to the guess, be committed to the process of guessing.” […] “Once we’ve accepted that a lot can happen between now and the future, financial planning boils down to making the best guess we can about what goals will help us live the life we want. Don’t worry about getting it ‘right.’ You can — and should — simply course-correct your guess when you notice yourself going off track.”
The part that causes me the most dichotomous feelings is the title: a one-page financial plan. I was really excited to see what his one-page plan was, because I really tried to simplify my example plan and it was still over two pages. Here is his “plan”:
Time with family doing things we love!
- Fully fund all retirement accounts each year
- Fund kids’ education account each year
- Save for house
Those are a list of priorities, and this fits so well with the kind of planning that Sandi describes in her library talks, about goals and direction. This is a fantastic exercise to do and I think it’s great that the book covers it so well — this is an easy thing to overlook when trying to plan.
And then I get angry because it’s not a plan, or at least not what you expected a plan to be going in, so the title feels like a cheat. Then there’s a great analogy about putting together a children’s toy, and the picture on the box vs. the detailed step-by-step instructions, which makes me love it again. But that still doesn’t make the picture on the box a plan. Grr!
Anyway, if you were expecting to walk out with a step-by-step guide for creating a detailed financial plan that mapped out how much you had to save in which baskets, you’ll be disappointed. However, it’s a short read, and thinking about your goals and priorities is an important part of the planning process, so it’s still worth your time.