"Strategery" for your Finances

I just love the (non)word, "strategery". It's one of Bush's little verbal flub ups, and it makes me smile. So today I'm writing about how to apply "stratee-gery", or wisdom from basic business planning, to your financial health.

Financial strategic planning is a lot like flossing: we all need to do it; we know we need to do it; and yet quite often, we don't. There are lawns to be mowed, wines to try, high shelves that need dusting -- you name it! Any excuse to get out of strategic planning.

The inherent problem with operating sans financial strategy is that you're much less likely to reach your goals if you don't set them! Ignoring your finances, counting on being lucky or thinking that it will get done in the future isn't strategy, it's excuse making. So pick a day sometime before the end of the month (which means you have 8 more from which to choose if you don't do it today), to answer the sets of questions below:

1. Where am I now? What are my investments? Where do they live? How much debt do I have? Am I paying it down faster than I'm racking it up? What are my spending patterns and where do I waste money?

2. Where do I want to be? In one, five, 10, 20 and 30 years from now, how do I want to answer the above questions? Do I have any other financial goals such as buying a house or car?

3. How am I going to get there? What do I need from my work/ career? Investments? Lifestyle? What is going to allow me to pay down debt and save more? Do I need a different job, position within my company or more education? What are my options?

Now that you've created some input information for the financial strategy session, it's time to create an actionable plan. According to David Collis and Michael Rukstad, co-authors of “Can You Say What Your Strategy Is?” in the April 2008 issue of Harvard Business Review, a strategy is comprised of three primary elements: 1) objective; 2) scope; and 3) advantage.

Objective is basically the answers to the questions in set two, or your overall set of goals. Scope is what you're going to do -- specifically, the answers to question section three. And advantage ties them all together -- it's the determination (you're already somewhat there if you're doing the exercise right now), perseverance, and energy you devote to achieving your goals.

In treating your financial health like a nurtured and planned business, you are much better position to succeed. And hopefully, you're approaching it in a more business-like manner, checking your emotional baggage at the door!