The One-Page Financial PlanOn the blog of late in our non-linkfest posts we have been spending less time talking about traditional investing topics and more time on issues dealing with more personal finance-related topics. For example, posts on aligning your goals with your finances, the value of mindfulness, making your savings goals stick and the need for humility have been fun to write.

The timing is therefore perfect to present a Q&A with Carl Richards of the newly published book, The One-Page Financial Plan: A Simple Way to Be Smart About Your Money. You may know Carl from his Behavior Gap blog, his column at the New York Times or his first book: The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money.

Carl’s book is really for every adult because it addresses the most fundamental issues we have with money, spending and investing. Most importantly it makes addressing our financial lives seem achievable. One of the biggest issues I see, and Carl addresses, is the fact that smart, middle class people a hard time even taking those first few, tentative steps towards creating even the most rudimentary financial plans. One-Page Financial Plan: A Simple Way to Be Smart About Your Money plan does exactly that.

I had the opportunity to send Carl some questions about his book when roughly break down along the three sections of his book that address: discovering our financial goals, spending and saving and investing. Today four questions about aligning our values with our finances.


AR: Why is money so difficult? So many, smart people who are competent in other fields, seem to have huge issues with money. To the point where they are simply paralyzed with the idea of it.

Carl: That’s a fascinating question. I think both experience and research back up that there’s a unique, even specific anxiety that goes along with money. Not only does it often feel financially complex with all the spreadsheets and calculators, but money also involves navigating complex emotional territory.

That’s often the piece that surprises us most. We go into money decisions prepared to deal with the financial complexity and we suddenly find ourselves dealing with emotional questions. It also doesn’t help how much information we now have access to. More information seems like a good thing, but the dilemma is that it comes with more options, and options tend to paralyze us. Even more frustrating, these options are often nothing more than someone else’s opinion.

AR: If how/where we spend our time and money is reflective of our values, then why do we so often find a conflict between the two?

Carl: I love the old quote that the checkbook and the calendar never lie. I know for myself that I don’t really care what people tell me is important to them. I know what’s important to them, what they value most, based on how they spend their money and time. Now, the question of why we often find conflict between what we say is important to us and what we actually spend our money and time is most often a function of not remembering what’s important to us in the heat of the moment.

Plus, we often haven’t bothered to get clear about what’s important to us and even if we have gotten clear, we often forget the wise words of Stephen Covey about learning to say no so we can say a much bigger yes in the future.

AR: As you note I think the fear of being wrong plays a huge role in our money anxiety. However few of our money decisions are final and irreversible. Aren’t we, as you say, just making a series of educated guesses along the way in our financial lives?

Carl: One of my big goals with this book is to give people the permission to feel less anxious about making perfect decisions by letting go of this false sense of precision which pervades our industry. We feel like we’ve got to know exactly how much we’re going to be paying in utility bills 27.5 years from now. I purposely use the word guess so we could start calling these decisions what they really are, guesses. Others have used words like forecast or projection to create a false sense of precision, but if we’re just guessing, we can relax. We make a series of educated guesses and move forward. Along the way, we can make course corrections, but it’s a relief to finally realize that no matter what we call them, we were going to be wrong anyway. And that’s O.K.

Q: In the book you talk about the need to put pen to paper in assessing our financial lives. That is crucial when it comes to calculating our net worth, yet few people do it. Once again is it the fear of seeing that number that prevents people from doing this exercise?

Carl: What you’re referring to here is creating a personal balance sheet, which is actually a really simple process, but don’t confuse it with being easy. Technically, it’s emotionally complex. Every line on a personal balance sheet, especially on the liability side, tells a story.

We may be anxious about the actual numbers, but we’re as anxious, if not more so, about the emotions that come with each line. We say to ourselves, “Yeah, I’m still upside down in that stupid investment” or “That money I borrowed for the new business didn’t work out.” There’s a tendency to react with shame and blame. Even if we don’t, our spouses or partners will remind us of our dumb decisions. As a result, both the numbers and our emotions about the numbers get in the way of figuring out our net worth.


Check back with us tomorrow for part 2 on the topic of spending and saving.


This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.

Please see the Terms & Conditions page for a full disclaimer.