Do you know why personal finance plans fail?

They are not written. Writing is great and powerful way of keeping self – and anybody for that matter – accountable. What is important is to ensure that the plans are SMART from the onset. Lets take my budgeting goal as an example

  • Specific – Use budget to grow investments by KES 5000 monthly
  • Measurable – Allocate 30% of pay to savings & investments
  • Attainable – Yes! There are no known pressing commitments. Emergencies have been budgeted for
  • Realistic – 70% of pay is able to meet monthly tithe and expenses
  • Time Bound – Grow the portfolio monthly

They are forgotten. Or most likely abandoned. Plans are disowned when they are too ambitious from the onset. Take the example of trying to get out of major debt while at the same time pursuing a real estate property deal. Such a situation will not only cause strain to one’s pocket, the logistical / planning demands of both assignments will be mentally taxing. It is preferable to tackle one primary financial goal at a time. This quickens the pace of achieving the goal and saves a big deal on other resources.

They are not reviewed often. Reviews help identify problems, bottlenecks and loopholes. A review will reveal that the emergency fund allocation is not sufficient thus prompting one to rework plans so as to accommodate more realistic figures. Another review will show that expected cash flows did not come in within the anticipated 3 months. The budget holder will immediately be able to utilize reserves in a way that doesn’t create financial chaos.

Dave Ramsey says its about momentum. I totally agree! And hopefully the sketch below can help in setting planning, monitoring and review deadlines…


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