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Financial Planning: ten most common failures!

October 23, 2012

One of the hardest things in a relationship is creating a financial plan. Because I have been doing this for so many years and pretty much seen it all I have much empathy for the commitment it takes to set financial goals as a family and stick by them. There is a general consensus among financial planners that most people make the same mistakes in planning their personal finances. Here are the ten most common failures in personal financial planning.

  1. Failure to have a family budget. A few minutes with a pencil and paper can go a long way toward helping you keep your spending under control.
  2. Failure to involve other family members. It’s understandable when one spouse makes most of the financial decisions, but it’s much easier to meet financial goals if both husband and wife are involved in the planning process. For example, both spouses should meet with the family accountant and lawyer.
  3. Failure to insure personal property at replacement value. For a modest sum, you can buy replacement cost insurance for almost all personal property. Discuss possible exceptions with your insurance agent.
  4. Failure to use employee benefits properly. The two most common examples are inadequate disability insurance (which is relatively inexpensive to augment) and poor utilization of payroll contributions to savings and retirement plans.
  5. Failure to diversify investments. Mutual funds such as index funds which are not investment specific offer the best opportunity for diversification.
  6. Failure to use the proper attorney. For preparing wills and trusts, consult an estate-planning specialist instead of a general practice attorney.
  7. Failure to have excess liability insurance. One of the best investments you can make is the very small premium for $1 million in excess liability insurance.
  8. Failure to have enough cash for emergencies. The rule-of-thumb to protect yourself against emergencies is to put aside six months for living expenses.
  9. Failure to project taxes. Without proper tax projections, seemingly good investments can create a unexected cash shortfall.
  10. Failure to establish goals. Put down on paper exactly what your goals are and what their cost is. This weeds out those which are impracticable or unattainable. (this is my favorite)

Yes this blog is about our failure to do what we think we should do…but now you know its time to start thinking about making it happen. In my years of financial planning I have seen so many couple walk in the door uncomfortable, angry and even embarrassed, but once they start talking about money it becomes much more comfortable and if all goes well they walk out with a plan. At Gunwel Associates we want to help you get thru these financial hurdles that we all go thru. Give us a call at 615-7302-9444 and lets start talking about how we can take these failures to wins. You work hard for your money, let us work smart to help you keep it! Call us or visit our website at We are here to help. Remember we have all been there…we know what to do. See you soon!

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