Why Financial Doing is More Important Than Financial Planning
Please, do not misunderstand me. Financial planning IS important. However, at least initially for certain individuals, at their current station in life, financial doing is more important than financial planning.
We will discuss financial planning later, for now, let us address the financial doing. Also, do not forget the 6 Easy Ways a Financial Advisor Can Add Value.
Financial Doing
Financial doing is about being in motion financially. It is about taking action and getting financial things done.
Right Now.
And frankly it is about saying to yourself, “LFG, Let’s Freaking Goooo!”
I know, I know, you are more likely to hit your target if you aim. I also know what I am saying sounds a lot like “Ready, Fire, Aim.”
In some cases, that is exactly what it is.
For some people, they just need to get something financially done. Naturally, you need to consider what needs to be done and what should be done first. Okay, this will require a little bit of financial planning. For now, just keep it short and get back to your financial doing.
By now, hopefully you know the 3 Reasons to Skip the Financial New Years Resolutions This Year.
However, you just need to start. Also, do not beat yourself up for not starting sooner. You cannot turn back the clock. Start where you are…today and:
Just do not overthink it.
Playing Defense
In sports terms, financial doing is about playing defense. And, as any casual sports fan knows, defense wins championships.
It is time to get up off your assets and get something financially in motion and then done. And remember the 4 Financial Lessons Learned From How to Pass in Middle School.
Start Small with Your Financial Doing Steps Forward
Most folks do not wake up one day and decide to run a 10-mile road race. The odds of anyone like this even finishing the race are 0%. Additionally, the odds of these folks getting injured during the race and ending up in urgent care are 100%. Those two odds would suggest not running 10-mile road race without some serious training first.
Any training for a road race of that distance would take some time. The distance you plan to run initially would be modest as you are trying to build up your endurance. So, you run one to three miles for several weeks to build up your stamina. Then migrate to 3 to 5 miles for the next month or so. Finally, extend this out to 8 to 10 miles where you believe you could, if not comfortably, at least finish the race, and avoid the trip to urgent care.
With your financial doing, it is like a road race. You need to DO some basic training first. Remember, with your financial doing:
It is about progress. Not perfection.
Review Your Financial Doing Habits
Much of what we do is based on our habits. I am not going to suggest what is a good habit, and what is a bad habit. That is far too subjective.
I would suggest that you look at habits that support what you are trying to accomplish and what habits do not support what you are trying to accomplish. Then there is no judgement.
Much of our habits begin with our physical well-being. For a primer on this you need to check out, Everyone Knows You Need to Diet and Exercise.
The key here is to just START small. And stick with it. Then go from there. For an excellent book on habits check out Atomic Habits by James Clear.
Mark Zuckerberg, Chairman and CEO of Meta Platforms (formerly Facebook) in the mid 2000’s said, “Move fast and break things.”
Keep in mind, I am not suggesting you start breaking things. In Mr. Zuckerberg’s world, technology, if you are not breaking things, you are not moving fast enough. That is the nature of the technology sector. Today, Exhibit A of moving fast and breaking things is, of course, Artificial Intelligence or AI.
However, moving fast here is required for going forward with your financial doing. Leave the ‘breaking things’ to the tech bros.
Remember, you should never stop with your financial doing. As you gain traction, there should be less for you to do. Just do not stop.
First Step With Your Financial Doing is Your Cash Reserve Fund
For example, the first step for investors to kick off their financial doing, is to establish a cash reserve fund. This is your first building block. A better term for this would be to call it a rainy-day fund. This is simply because some days well, it rains. Some days it rains…a lot.
It is not a question of whether you will have an emergency. It is just a matter of when:
- Your car breaks down.
- You have unexpected medical bills.
- Your furnace breaks down.
You get the idea. Stuff happens. Usually, stuff that is not a whole lot of fun.
Your rainy-day fund is something you need to access immediately when you have an emergency. You will have an emergency:
Plan to have way more than one emergency in your lifetime.
Get used to it. The substantial difference now is that you will be prepared with your rainy day fund.
Your rainy-day fund could be in a savings account, money market account, or a high yield savings account. The key point is that you have access to these funds immediately.
Most commentators would recommend having six months of your living expenses in your rainy-day fund. Most folks have nowhere near that amount of money in their rainy-day fund.
Nationally, the median U. S. household has about $8,000 in deposit accounts, or their rainy-day fund. However, this number varies wildly by state. The state with the largest accounts is Hawaii with a $43,600 median. Mississippi has the lowest with a median of $2,000. Regrettably, one in four adults had no rainy-day fund at all. 1)
Your Spending Plan
This is the financial part (doing that is). Many commentators will suggest you prepare a budget. Please, do not call this your budget. That sounds far too restrictive. Call it your spending plan. The key term here, of course, is:
Your.
You get to decide how to spend your money.
First, calculate what it costs you, a month to live. Do not forget to include items that you may only pay for once or twice a year. This would include real estate taxes, property taxes, car insurance, homeowners’ insurance, and personal umbrella policy insurance. You will need to spend the time calculating how much of these expenses that you do not pay monthly need to be calculated into your spending plan.
Second, once you know this number, compare it to what you currently have in your rainy-day fund.
For example, let us say it costs you $8,000 a month to live, or $96,000 a year. If you only have $8,000 in your rainy-day fund, you only have one month of living expenses in reserve. Do not beat yourself up over this. You are where you are. See how quickly you can double that to $16,000 and have two months of living expenses in your rainy-day fund.
Doubling your rainy-day fund will more than make your financial picture better.
More importantly, it will significantly reduce your stress around your finances.
Show Me The Money
The money needed to increase your rainy-day fund will need to come from somewhere. First, you will need to say Goodbye to the Joneses. 3 Practical Steps to Arrive Financially.
Second, what will have to change in your spending plan and how long will it take for you to save the next $8,000?
This is a personal question, but this is also part of the financial doing process. Will you?
- Cancel some of your subscription services.
- Eat out less.
- Reduce some other items in your spending plan.
- Take some of your income tax refund and put it in your rainy-day fund.
These are just some of the trade-offs you will need to make.
Not to talk about, to do.
As Nike Said:
Just Do It.
Paying Down Your Very Expensive Debt
The next step is to start paying down your high interest loans. These could be credit cards, car loans, student loans, and personal loans. The rates on these loans can vary based on your credit history and credit score.
First, credit cards lead the way and on average charge 21%. Second, are personal loans at 10%-18%. Third is car loans that vary from 7% for new cars and 12% for used cars. Finally, federal student loans charge from 6% to 9%. Either way, these are not low interest rates. 2) 3) 4) 5)
The key term here is to just start paying them down or off. Always remember:
You can not borrow your way out of a spending problem.
Financial Planning
While the headline suggests financial planning takes a back seat to financial doing, this is not the case AFTER you have initially done some financial doing.
Once you have established some level of financial doing, then turn on the financial planning. Now you have the momentum, keep it going.
You have played (and will continue to play) defense with your financial doing. Now it is time to play offense with your financial planning.
First, protect yourself and your family by having inappropriate estate plan. Do not get overwhelmed by the term estate plan. It means you will need three documents.
*A Will
*A Power of Attorney
*A Healthcare proxy
While this can be done online, I would not recommend it. Find a good, local estate planning attorney.
If you are married, both of you will need each of these three documents. When you go to see your estate planning attorney, just tell him or her that:
Tom said we need the six-pack, they will understand.
If you do not have a valid will, this is called intestate. When you pass away, the state has rules as to how your assets will be distributed.
Is that what you would want?
Not me. You can get some very bizarre outcomes depending on your states intestate laws.
Second, start saving. If you are not already contributing to your employers 401(k) plan, start today. If you are contributing, figure out how you can increase your contribution by 1% or more. Most employers will offer an employer match. Contribute enough into your 401(k) plan to get the employer match.
Many commentators will say the employer match is “Free Money.” Like much of the news today:
That is fake news.
The employer match is not free money. It is an employee benefit. Take advantage of this employer benefit by contributing to your 401(k) plan and getting the employer match.
Investing into your 401(k) plan is tax deferred. Additionally, this allows your money to compound. This means you are making money on your money. Take advantage of compounding. Albert Einstein, a very sharp dog said, “Compound interest is the eighth wonder of the world.”
The late Charlie Munger, former Vice Chairman of Berkshire Hathaway said, “The first rule of compounding: Never interrupt it unnecessarily.”
Other Financial Planning considerations are:
Why You Shouldn’t Chase the Latest Investment Fad.
3 Easy Reasons You Need a Financial Lifeboat Drill.
The Back Nine- Practical Financial Steps for Retirement.
No Mulligan for Retirement – Easy Ways to Get it Right The First Time.
Conclusion
If you would like help with Why Financial Doing is More Important Than Financial Planning, call Thomas F. Scanlon, CFP®, CPA at (860) 645-1515 or e-mail at Thomas.scanlon@raymondjames.com.
This is original content prepared by Manchester, CT Financial Advisor, Thomas F. Scanlon, CFP®, CPA.
- Freedomforallamericans.org – September 24, 2025
- www.cardrates.com
- Wallethub.com
- Finance.yahoo.com
- Studentaid.gov
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The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Thomas F. Scanlon, CPA, CFP® and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and subject to change.