A Financial Strategy Is Better Than A Financial Plan


*A shorter draft of this post originally appeared in my email newsletter on September 16, 2015. Missed it? Sign up on the homepage for weekly updates!

It often surprises people to learn that I do not have a financial plan.

(and I don’t think you should either)

I don’t make financial plans. I set goals or choose milestones, but I don’t “plan” on anything. For example, I have no idea how much I need to retire (I’m 29, for Godsakes!), I can’t predict what my income will be 3 years from now, let alone 5 or 10 years from now (am I allowed to say $1 million?), and I don’t know if or when my fiancé and I will buy a house (in this economy? Never!).

Personally, I find most plans distracting, limiting, and pointless. There are too many unknown variables. The more years the plan covers, the more useless it becomes. But people love plans. We love to map out our finances for the next 5, 10, 50 years and think about how great everything will be if it all goes according to plan.

It seems to occur to virtually no one that what you want for yourself at age 25 may not be what you want at age 65.

But you should throw out your plan and adopt some financial strategies instead.

A strategy is better than a plan because a strategy is about the execution of your goals rather than the hope or idea of them. But what do I mean by this? For example: An income goal is a financial plan, but a side hustle is a financial strategy.

You can spend your time thinking about how much you would like to make (aka. dreaming up a financial plan), or you can set up the systems to start delivering an increased income right away (aka. executing a financial strategy).

What do you think is more valuable?

Saying you would like to make an extra $5,000 per year…


setting up a side business that may only earn you a few hundred dollars this year, but thousands or even tens of thousands (dare we say hundreds of thousands?) of dollars in the years that follow?

Your financial plans could be limiting you in a way you don’t even know, but your financial strategies open up the doors to limitless opportunities. It has been my experience with personal finance over the past 5 years that, when you’re just starting out, good money habits are more important than amounts. Saving $25 per week won’t make you a millionaire, but learning how to save an amount that really cuts into your budget will.
Like most things, we can’t completely see the outcome of our actions until long after we’ve made them, and this holds true for your money. Paying your debt, saving for retirement, and looking for a higher paying job might all feel futile in the moment, but the lifetime payoff is probably greater than you imagine — you’ll probably learn something unexpected along the way!

Financial strategies to consider in order to add wealth to your own life:

  • creating and sticking to a budget
  • commit to saving a fixed amount of your paycheque
  • choosing to live debt-free
  • trying out a Shopping Ban
  • investing in the stock market, even if you have little money
  • negotiating your salary
  • starting a business
  • buying only used cars, or going without a car entirely
  • renting instead of buying if it makes sense in your city
  • cultivating multiple streams of income
  • donating a fixed amount each month to charity

Too big? Think small, with mini financial strategies such as:

  • reading one personal finance book each year
  • practicing one or two no-spend days each week
  • put a $20 bill in the pocket of your winter coat at the end of the season to “find” when you take it out next year (it’ll make your day, I swear!)

Actions are more powerful than plans.

You’re in control of your actions, but plans can be easily derailed by external forces. I should know, my plans rarely go according to plan. Remember that time I got a Bachelors degree in Chemistry? What is that even for? I had a plan. I can tell you my current life is not it, and for that I am eternally grateful.

You do not have control over things like the economy or whether or not you’re laid off from your job, but you DO have control over starting a side hustle, curtailing your spending, and building a fat savings account you can rely on in times of need.

Likewise, you have no control over house prices, but you DO have control over how much you save for a down-payment. You have no control over how well you age, or when you may need to stop working, but you DO have control over amassing enough savings to leave the workforce whenever you choose — decades before you turn 65!

Some plans are better when they don’t work out, and your financial plan is probably one of them.

One of the biggest mistakes you can make is sticking to a plan that no longer serves you. This could be a career you went to school for, but now hate. It could be a certain age you’ve pegged for retirement. I could be a number in your bank account that means you can start your business. If we’re married to our plan, we can miss being ready when an ideal opportunity presents itself.

It’s hard to talk yourself out of your own bad ideas. It feels so unnatural most people take it as a sign that it’s the wrong choice. It’s not.

Challenge your plans. Or rather, challenge your assumptions about your plans. The career you have, the amount of money you think you need, the lifestyle you want — it’s possible your plan is all wrong for you, even if you made it yourself. Your wants, needs, and tastes change with time, so look for financial strategies that are flexible and accommodate changing circumstances, rather than plans that keep you trapped in a lifestyle you no longer want.

A strategy is a set of behaviors or habits that you practice on an ongoing basis to meet your goals.

You don’t need to have a financial plan, but if you do, a strong financial strategy will let you achieve it on autopilot.

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13 Comments. Leave new

  • I am the type of person that has a financi plan, but I do it only for the next 12 months. A few days ago I was reviewing my plan and realisef that I would not reach my long term goals unless I changed the way I think about my finance. Therefore, I am challenging my self to find ways to supplement my income. A plan is nice but a strategy is even better.

  • Love it! Failure derails plans, but strategy can easily absorb failures which is why I emphasize strategy over plans too.

  • I think the same way! It’s hard to know exactly where I’ll be in however many years, so I basically ignore that. I have goals for saving each month, and plans to increase my income over the long haul, but not a particular amount of money to have by age 65.

    Also, so doing this!

    “•put a $20 bill in the pocket of your winter coat at the end of the season to “find” when you take it out next year (it’ll make your day, I swear!)”

  • Great way to look at financial planning. Your plan should include strategies and tactics to achieve your goals. The Art of Financial War.

  • Hey Bridget, any suggestions for good personal finance books? What’s your favorite? I could definitely stand to read one (or more) per year!

  • I agree, to a certain extent. Especially on the retirement calculator – they always made me suspicious, because there are just TOO MANY ASSUMPTIONS over a 30+ year career! My overall strategy is to make decisions today that are likely to give me good options in the future.

    However, the next 12 months or so is a lot more clear, and I like to have a plan, like, I will save X in retirement, and Y for this other thing… Really, it is prioritized plans for my money. Goals are meaningless with a plan, plans aren’t useful without actions, but the best situation is actions based on plans, tied to goals, tied to an overall strategy

  • I love the focus on goals and milestones! Aim for something up don’t get caught up in the planning without action.
    Great article. Great site! And congrats on getting married and quitting your job (!!!!) very inspiring!

  • Every year I change the way my behavior to saving. I remember when I got my first salary, I divide them into 2 saving: Daily Account and Freedom Account. I change my mindset for Emergency Fund into Freedom Account. I don’t want to attract any kind emergency event or situation into my life that’s why i called them Freedom Account. Because every year i reset my Freedom Account, the previous amount I put on CD and have great interest every 3 month. I play with the strategy, it’s more way fun 🙂

  • I’m always impressed by the people in the early retirement community who know exactly how much money they need to retire and how much time it will take them down to the penny. I am so flighty and change my mind all of the time. I’ve pursued 5 different career paths in the past 5 years, I’ve lived in three states, I’ve changed my idea life picture more times than I can count. I totally agree with you that sometimes actions lead plans.

    • Right?? It’s so crazy to have everything figured out before you know your life (or yourself!). My strategy is just to save heaps of money so I can do whatever I want — but that doesn’t necessarily mean stop working.


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