Send the SWOT on Your Money

No, I didn’t mis-spell SWAT, so the picture above is a little misleading. I just think guys in gas marks are pretty intense. And intense is how I roll–dropping this little analysis method on your money is going to feel like the SWAT team flying in, full-force.

Several months ago, I wrote about how you could apply a standard business plan to your home finances. Since that time, I’ve been working closely on the guts of a number of business plans, and have come to know and love specific portions for their tendency to make me think and evaluate things with a critical eye.

Over the next three posts, we’ll explore some of these components – the SWOT analysis, the profit and loss table, and the executive summary. All three have specific and useful personal finance applications that will help you define where you’re headed and how you plan to get there.

What is SWOT?

Wikipedia defines SWOT as a “strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.” Hat tip to Albert Humphrey, who analyzed data from Fortune 500 companies and developed the technique. It’s fantastic and it works on almost any future objective.

SWOT is divided into two main segments – strengths and weaknesses, which deal with internal characteristics, and opportunities and threats, which deal with external forces. Each segment is uniquely critical to the overall analysis, as you’ll see in a moment.

Why is SWOT so Useful?

SWOT is extremely useful because it helps in the planning process by identifying things that will be helpful and harmful to achieving the ultimate objective.

Each question presents a new paradigm of thinking – internally vs. externally, and pro vs. against. The exercise starts with a stated end objective, as simple as “financial security.” At the end of the exercise, we should arrive at an informed list of forces that will either help or hinder reaching that goal.

Going though the analysis can be as simple as meditating quietly on a Saturday afternoon, or as complicated as creating a color-coded computer spreadsheet and corresponding chart. Whatever seems to call to you – go for it.

For now, you’ll probably want to grab something to write with as I go through each of the components of SWOT:

Strengths and Weaknesses

I’ve grouped the “SW” portions of SWOT into one section because they are either-or characteristics. Each question we’ll look at will either fall into the strength or weakness column.

Strengths & weaknesses generally have to do with personality traits and your unique skill set. Capitalizing on skills and watching your back on weaknesses are both keys to using this analysis to your best advantage. We’ll get into that a little more later.

Getting to the heart of your strengths and weaknesses is a very personal matter, much more so than for the “OT” component. It’s an examination of your focus, your history, and an honest assessment of your skills.

With the understanding that your will have to dig deep to identify your own S&W, here are a few prompts to get your started on your thinking:

  • What are some of the skills you have that have a direct financial application?
  • What has worked in your financial life in the past?
  • What has not worked?
  • Has anything sat stale that you wish would move forward?
  • What is your childhood “program?” How do the things you learned growing up affect your emotions and actions with money now?
  • How do you deal with mathematical concepts or financial jargon?
  • What is your overall tolerance of risk when it comes to life and money?
  • What is your age? (Don’t worry, I won’t ask you to tell–but it’s important to know, especially for things like retirement)
  • What are your money “buttons?” What really pushes you over the edge when you talk about money?
  • How are your relationships with those closest to you when it comes to money? Can you talk about it openly and without too much emotional attachment?
  • Are you able to learn and adapt quickly and effectively?
  • Have you developed customized systems or methods for your money? Do they work or fail?
  • What makes you unique from everyone else?


The “O” component is sufficiently different from the “T” component (threats) to deserve its own section. Opportunities are like doors – the might be open right now, you might expect them to open in the future, or they may need a little coaxing or forceful entry.

Like threats, opportunities have to do mostly with outside forces under or outside of your control. Look beyond yourself and think about things that will be helpful in your quest for world domination. Here are a few ideas to consider:

  • What is your expected career path? What opportunities might propel or change that path?
  • What are some ways to control your money better? Save more? Cut back on expenses?
  • Do you have circumstances that are currently in your favor?
  • What “bucket list” ideas in your head right now have a financial application? Do you have a great business idea you’ve been hiding?
  • Do you have a desired direction in your life?
  • What “doors” are currently open–career options, large purchases, etc.?
  • Are there market trends in play that can enhance or threaten your decision? (For example, how is the real estate market?)
  • Are there opportunities to earn a side income or start a home business?
  • What are some things you feel you’re ahead on?


Threats are actual or perceived external forces that can prevent you from reaching your goals. This list can obviously go on forever, so we want to strike the balance of being realistic while ensuring that we capture a lot of the probable and also some improbable threats that can bite.

Consider your own life and things that could go wrong in the future. Maybe some of these will ring a bell:

  • Do you have a dependence on anything? For example, are you dependent on a paycheck, a future tax refund, or anything else to come through?
  • Is the safety/security of anything in your life an issue right now? Your job, perhaps?
  • Are you particularly exposed to future lawsuits, maybe because of your professional career or other liability factors?
  • Are there things in your life that are, or could become, very unpredictable? (Like self-employment income or large expenses?)
  • What are some things you feel you’re behind on?
  • How do the current economic conditions affect your bottom line? Can they affect it in the future?
  • What circumstances are currently not in your favor?
  • Would future changes in government affect your finances? (A large tax increase, for example)
  • Can inflation kill your retirement or college plans?
  • Are you prepared for unexpected events like accidents, health downturns, and others?
  • Could your credit score negatively affect your ability to make major purchases?

Using your SWOT Analysis

Creating your first SWOT analysis means writing down everything you always knew about yourself and may have thought about once in a while, but never really got on paper. It makes the sum total of your life and your goals converge in one location and enables them to be evaluated as a whole. Pretty neat…

Having completed your SWOT, you can take each section and evaluate it individually. For example:

  • Leaning on the strengths – Most of us want to be known for what we are best at. Therefore, it makes sense to capitalize on your strengths and develop them even further. Become an expert in what you can rock out at.
  • Protecting and improving weaknesses – While it’s critical to optimize your strengths, it’s also important to work on your weaknesses so that they’re less of an effect on your life. Being aware of these blind spots and protecting yourself from them will help in the long run.
  • Going after opportunities – Opportunities may be available to you all day long, but without recognizing them and being proactive about the process, they may just pass you by completely. Very little in this life comes without work, and if your opportunities are truly important to you, effort will be key.
  • Guarding against threats – The nice thing about threats is that we can prepare for all of them, in one degree or another. Whether it’s an insurance policy, a plan of action, or another form of preparation–being ready to act when a threat rears its ugly head is critical in the usefulness of this plan.

Another neat capability of SWOT is cross-referencing the categories and making relationships between them. For example:

  • Strengths-Opportunities – How can you use your strengths to take advantage of potential opportunities available now and in the future?
  • Weaknesses-Threats – Which of your weaknesses may enable or enhance the danger of a threat and what is the best way to mitigate it?
  • Strengths-Weaknesses – Can any of your strengths compensate for or help to develop a weakness that you have?
  • Strengths-Threats – Will any of the strengths in your tool belt protect against potential threats?
  • Weaknesses-Opportunities – Do your weaknesses have the potential to throw in a monkey wrench as you go after some opportunities in your life?

At its very basic level, SWOT will spring from your mission and goals–and will ultimately serve to develop and expand those goals even futher. If done well, it’s a constant cycle of planning, doing, and evaluating.

SWOT is extremely useful in business analysis, and I hope that you can now see how to apply it in your own life as well. Happy SWOTing!

Photo credit: alshain49 via CC2.0

5 thoughts on “Send the SWOT on Your Money

  1. Wow, This is Awesome! Many times we think about discovering and re-inventing ourselves and find it helpful to dig our heels into some decent self-help books, but this all fits into a neatly categorized box wrapped w/a bow! I think you are really on to something… a workbook developed to grade ourselves (strengths and weaknesses) alongside the seemingly unrelated pitfalls (O&T) as related to our current and FUTURE financial well-being would sell like gold, and I would be your #1 FAN! I am going to sift through my mind’s bU*****t using these principles and see what comes out of it. Great post!!!

    1. I’m glad you enjoyed the post! You may be on to something with the workbook idea… 🙂

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