PLANNING Part 2: The Financial Plan

Part II

We used to have no financial plan at all. Since my income as a self-employed professional was irregular, I would tell my wife and children, when I earn this and that amount, we will buy this or that or go on vacation. We were coasting along, wondering why our finances were always tight and we cannot afford many things that we needed. Our car would always breakdown because they were too old and in need of replacement.

Later on, this way of doing things sounded like our lives depended on how my business is doing and not on how we want to live our lives. It looked like our business is driving our lives and not the other way around. We realized that the Lord wanted us to plan according to His will and He will bless it and help us accomplish our goals. He wants the glory to go to Him.

Without planning, we were always afraid that the economy might turn sour and our lives will be affected by poor performance of my business. We would always scrimp even on the things we needed. We were so afraid that my expected collection might not come on time. We had no strategy. Circumstances became our guide. We were not leading our lives. We were just following whatever circumstances dictates. We did not realize that we were living in fear and our financial decisions were based on fear. But the bible says we shall be the head and not the tail. We can live in faith instead of fear.

So, after careful thought, I asked my wife, how much do you need to cover household expenses plus have a comfortable budget for your own personal needs? My wife being so thrifty, gave me a small budget which I increased to provide allowance for contingencies. We combined that amount with my own expenses and we called that our monthly budget. My business should be able to afford that amount as my salary being the owner of the business. This became a goal that we cannot compromise. We believe God wants that covered as much as we do.

So I had a salary out of my business which is incorporated in my business financial plan. But what if my business, whose income is irregular is not able to cover my salary? This is where our prayers and faith even of my children came in. In our many years of experience, we have seen how faithful the Lord is. He is faithful in fulfilling His promise to prosper us. But I believe He always wants to see our plan.

We have bought a house, cars, some properties from savings. We have given generously. I realized that whenever we pray for God’s provision, He asks us, where is your financial plan? The financial plan must be aligned to His will. Let us remember, we are stewards but at the same time, He is generous.

Same thing happens when we run a company. If a department submits a budget for the coming year, the CEO or owner would ask the department head, what is your plan? As CEO, will you support the department who does no planning?

Our planning makes sense when we know that God is going to back us up in pursuing our goals.

Last Part: How to prepare the Personal and Business Plan