Financial planning

What's your plan?

Cera Taylor

You have hopes, dreams and aspirations and you know what you want your life to look like. Every year, you hope that this will be “your year”, that things will start to fall into place, but you hoped that last year too and so far 2020 hasn’t been what you expected. So how do you break the cycle and make the last half of 2020 different?


I believe it starts with a plan

The last few months have been a great opportunity to pause and take time to reflect but now is the time for action. As esteemed US business futurist, Joel A. Barker said:

Vision without action is merely a dream.

Action without vision just passes the time.

Vision with action can change the world.

You deserve to live a fulfilled life and be happy, but it starts with you. You need to make a plan or find someone that can help you make one, to ensure you live life richly and without regrets.

Here are 4 key questions to ask yourself when starting to build a financial plan.

1. What are your goals?

This is the fun bit! Clearly defining your goals can be a cathartic process and provide you with clarity and focus. Arguably, sharing your goals with others can create a sense of accountability too. Try to consider the SMART principle when setting your goal:

  • Specific – Clearly define what the goal is and use details such as numbers where possible (quantify it).
  • Measurable – Think about a tangible way in which you can measure your progress.
  • Achievable – Are you ambitions realistic; with planning we are often capable of more than we realise but being pragmatic is important. A financial planner may be able to help you to balance this.
  • Relevant – Are your goals in line with your own personal values? It may be useful to chat this through with somebody else to clarify your values.
  • Timebound – Think about the timeframe you are working within and whether there is any flexibility needed.

Your goals are personal and unique to you, they really can be anything. Perhaps you want to set up your own business and follow a lifelong passion or maybe you want financial security and to ensure you can pass a legacy onto your loved ones.

2. Where are you now?

The garden has been pruned to within an inch of its’ life and you have acquired baking skills to give Mary Berry a run for her money. The last thing on your lockdown list is to go through the dreaded personal finance paperwork. I promise starting this job is the hardest bit and the rest is pretty easy!

Go through your paperwork and shred any old documents that you don’t need and file the important things using clear labels. Make a list or a spreadsheet of what you have, where and how much; this could include any assets such as property, cash balances, investments, pensions, protection policies and any debts such as mortgage, credit cards or loans.

Look at your income and expenditure levels; there may be some money left over (disposable income) that could come in use later.

If you’ve any queries or something you are not sure of, now could be the time to speak with a financial planner to help guide you through.

3. Are we there yet?

Now you’ve defined your goals and you’re clear on your current situation, it’s a good time to work out if you have “enough” to achieve your goals or if there’s a gap. This isn’t an easy task, as there are often many variables to consider such as inflation, tax and growth rates to consider.

Financial planners use intelligent software to build cashflow forecasts, which generate personal, visual graphs to show whether your plan looks sustainable or not. The good news is, there are usually many recommendations that can be given to improve the viability of your plan, which is why planning early is important. A financial planner will chat through your options and recommend the most suitable course of action for you based on your circumstances and implement them on your behalf.

4. What Next?

As we’ve seen this year, things can change very quickly, so reviewing your plan is important to ensure that it remains on track and in line with your needs. Your lockdown garden may be immaculate now, but it will need some more work on it in the future. Your financial plan is no different; it needs regular maintenance to keep things looking pretty.

If you need help building or reviewing your own financial plan, please get in touch with 1825, we’d love to hear from you.

Important information

The information in this blog should not be regarded as financial advice. Please remember that the value of investments can fall as well as rise and you could get back less than you paid in. All information is based on our understanding in June 2020.