Thursday, October 21, 2010

Why Aren't People Planning?

Have you ever had a financial premonition and were scared poopless? What were the circumstances and how did you deal with it?

I had such a moment when I participated in Dave Ramsey’s Financial Peace University at a local church (the first of 13 sessions). There were about 20-30 people in attendance, quite a few couples and only a handful of folks under the age of 30. We were asked to share our names and why we decided to attend. Stories poured forth about middle-aged individuals coming to the sudden realization that they had to find a way to pay for their 17 year old’s college education, prepare for a dignified retirement or dig out of mounds of consumer debt. In those moments, I thought to myself that there is no way that I would want to be in a similar conundrum. What’s more, these folks could have been in better [financial] circumstances if they had done one thing: plan. I recognize that recent market activity has wrecked havoc on retirement accounts, savings and other investments (I hear my family discuss how such activity has impacted their plans). I am not naive to the reality that folks have been losing jobs, either. In fact, my godmother has been through a few temporary employment stints in the past two years and she still hasn’t procured a permanent position.

I contend, however, that the individuals who planned (and executed their plans) fared better than those who did not plan (and execute) at all. Sadly, my observation about the company I was in during this class was that most of them failed to plan, altogether. Further, I find myself frustrated with individuals who find themselves in the "sudden" predicament of having to make a big purchase....and they haven't prepared for it.....and they're still spending money on random things (oh yeah! we just decided to go to Atlantic City this weekend to gamble and go shopping). So this forces me to ponder, how much time do people think they need to prepare for major expenses and how much time do they actually need to prepare for such expenses? Major  expenses = buying a home, paying for college, preparing for retirement, eliminating debt, etc. From my perspective, there are many people who are slacking on the finances, however, I could be overreacting. this dude:

What do you think?

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