Last January, I shared my family’s financial planning checklist that’s revisited throughout the year. This has created a repeatable process and is how I make countless decisions beyond “investing” for my family. As your wealth expands, more questions arise. It’s easy to ignore answering or to react too quickly without perspective. This is exactly where unforced errors are created.
No one’s perfect, including myself, and mistakes will happen. Unforced errors are a different kind of mistake. They are subtle, less obvious, and if left unchecked can create significant obstacles in getting what you want. These self-inflicted fumbles arrive and accumulate by hiding among other pressing priorities in the moment.
It’s rarely the big mistakes that get you from a time and financial perspective. It’s more often the slow leak of air from that tire over time that eventually flats out. Unforced errors may be minimized by taking control of the controllables. This includes:
- What do you do with your time?
- How prepared are you?
- What does your process look like?
By not managing your time, preparing, and following a process, you paint yourself into a corner. It’s not pressure that creates unforced errors but rather a lack of focus, bad habits, and poor decisions. These are the ingredients for more challenges in the future which often appear at the most inopportune times. The good news is they are avoidable by:
- Slowing down and thinking through your choices
- Minimizing complexity
- Focusing on the quality of your decisions, not the outcomes
In real life planning, there are countless unforced errors that can sneak into our daily decision making. Here’s a sample of what I see throughout the week when it comes to planning and strategy.
- Not integrating cash flow and savings into your choices
- Waiting till it’s necessary to refill cash reserves
- Not linking employer retirement accounts to your plan
- Accumulating target date funds, too much cash, or too much leverage
- Ignoring 529 accounts until they are needed
- Allowing a career interruption to override planning
- Accepting a leaky financial plumbing system
- Accumulating too much employer stock
- Defining wealth only in terms of money
- Making decisions from an outdated plan
- Ignoring the progress from your 2023 balance sheet
- Feeling anxious and controlled by money
- Not electing more federal tax withholding
- Getting around to it later versus today
- Keeping your investment contributions static as your lifestyle and income expand
- Missing changes to outdated ownership and beneficiary titling
The solution to all these mistakes (and more) is ongoing communications through a repeatable process. Talking aloud with another human (not algorithm) is what it takes to gain clarity and prioritize your decisions. Another positive outcome of this process is reducing unforced errors.
This empowers you to live your life with less worry and regret. Spend freely and often knowing you have the confidence of a plan and planner who has your back. Soon enough it will be time for another conversation, a huddle up, a review of upcoming decisions. You don’t need to travel alone; planning is easier and more engaging with a friend.
