Question

Tom prepares an elaborate financial plan and tries sticking to it very strictly. He is concerned about eventualities that might occur in the future and disturb his plan. What practice can help him prepare for any problems with his plan?

Answer 1

Tom should review and revise his plan on a regular basis, e.g. once a year or once every 6 months. A financial plan is a budget, and like all budgets, it represents an estimate or forecast of future events. If any person was able to predict the future and be 100% right every time, they would play the lottery and earn millions every week. The future is always uncertain, and just like a company must review and revise their forecasts, so should Tom. This advice applies to all of us that try to stick to some type of financial plan.