Financial Planning.

Two words that can inflict a weary feeling and a roll of the eyes. Not because we don’t understand the importance of robust financial planning but because for many, financial planning is often seen as a tedious job and, in some respects, a financial burden.

A financial burden because quite often financial planning is seen as paying money into pensions, investments, and saving for a rainy day, where for some of us that rainy day may never come, or it may come sooner than we think and then what?!

In this post, we look at financial planning from a different perspective.

From your perspective.

What is Financial Planning?

Let’s start with what it isn’t.

Financial planning isn’t looking into the best pensions or investments to put your money into (it’s a big part of it, but it’s not all of it), and it’s not a reason to sell you something you don’t need.

It’s about you.

It’s about supporting your lifestyle.

Supporting your life and how you want to live it.

Ensuring you have enough to do what you want to do and providing a clearer understanding of when you can afford to do what you want to do.

Talking to a stranger

From a financial advisor’s perspective, most people we speak to don’t know what they want, and this is where the best part of our job comes in.

We get to know you.

It’s our job to sit and talk to people on a personal level.

Not to sell, but to listen.

Finding out about you, your family, dreams for the future, plans for retirement, before retirement, and more.

Talking about money and finances can often be a difficult conversation to have, especially with those you’re close to, family and friends.

The stigma surrounding this often stops us from admitting our financial truths.

However, this can change when talking to an external professional ‘stranger’.

People open up when they don’t feel judged.

Making the role of a financial advisor a big part of people’s financial lives.

Life is not a rehearsal

There are no second chances, and its true what they say that all too often, “life’s too short.”

Of course, by all means, save, but financial planning helps you to spend wisely too. For example, don’t put off that trip to Australia before you’re too old to enjoy it truly.

An analogy like no other.

Financial planning and product pensions/investments are a bit like the shiny exterior and engine of a car.

Let us explain.

When you go to buy a new car, you look for brand, colour, style, the size of the boot you require,

does the inside meet your requirements, does it have everything for your family, the kids, etc.?

However, the engine apart from its size might be something you don’t look at closely.

The reason we don’t look at the engine closely is that we expect it to work, to allow the car to function, and for you to drive from A to B with ease.

For example, products such as pensions, are the car’s engine, and the nice features of the vehicle then become the benefits that financial planning can provide you i.e., the holiday, early retirement, holiday home, etc.

When we think of it like this, we can begin to see its importance as well as its value.

Benefits of financial planning to you

• Financial planning helps you to keep your finances organised
• It helps to keep you structured
• It provides you with peace of mind, allowing you to get on with your life
• Working with the right financial advisor, honesty on both sides will be valued
• Allows you to seize opportunities that come your way
• If problems arise or something in life crops up (as it always does), you can have complete peace of mind that you can manage it financially (with catastrophe planning) and still make good of any situation

Financial planning in context

There are two elements to financial planning:

Keeping Score vs. Lifestyle – or indeed a mixture of both.

For example, you could look at financial planning as a way to support your lifestyle, now and in the future.  Alternatively, you could see financial planning as a way to keep a closer eye on your investments, knowing exactly how much you have at any given time.

More often than not, people like to have a mix of both of these elements, and to achieve this, there are certain parts of financial planning that need to be considered.

These include:

Organisation – getting your finances in order!

Responsibility – determining accountability helps you to stick to your goals and achieve your dreams, reviewing regularly.

Honesty – providing honest answers and the truth on all financial issues, good and bad.

Financial advisors help to take the emotion out of financial decisions and instead look at them more objectively.

Proactivity – helping you to be financially prepared for whatever life throws at you. Planning for the future, challenges, changes, opportunities, goals, dreams, and more.

Education – what do you need to do to get the lifestyle you want?

Working together – financial advisors and clients need to work together as a partnership if action plans are to work.

What are your aims?

It’s important to think about your rainy day.

What are your dreams, and how can reliable financial planning help point you in the right direction.

Where do you want to be in 5, 10, 15 years?

And do you know how to get there?