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What is Financial Planning? 

Welcome to the first of our blog posts. Thank you for taking a few minutes each week to read, and we sincerely hope that you enjoy the content and find it to be of value.

For our first topic, we decided that we wanted to cover ‘What is Financial Planning’. Long gone are the days of sharks in pinstripes trying to sell you an investment product or an insurance policy. True financial planning starts by gathering an idea of your goals, hopes and dreams for life, and then using what you have available as the tools to help you achieve those goals. Lifestyle financial planning helps you avoid running out of money, or dying with too much. It helps you achieve, and maintain your desired lifestyle in a tax-efficient manner.

How Does Your Financial Future Look?

Do you know what your finances look like today? If so, that’s great— you’re on the path to setting your financial goals, even if you didn’t know it! This is crucial for anybody, and it’s especially important in today’s climate.

However, knowing where you are is only the first step towards planning your financial future. Do you also know where you want to go? And if so, do you know how you’re going to get there? These steps are just as critical to helping you achieve your goals, such as retiring early, travelling extensively, donating to charity, or helping your family financially. Whatever your image of the future is, today’s the day to get started on creating it.

Some key questions to ask yourself when thinking about your aspirations and finances are:

  • What are my hopes and dreams for life?
  • What truly brings me joy and happiness, and how can I do more of this?
  • What regrets might I have when I reflect back in 20 years’ time?
  • Would I rather leave a legacy for my descendants, or maximise my personal enjoyment? Or perhaps a sensible blend of both.
  • If I woke up tomorrow and had enough* money, what changes would I make?

*enough is defined differently for everyone, and is where a qualified financial planner can help you understand when you have ‘enough’ for your life goals.

How do I get started planning my financial future?

Try to focus on thinking about your short term goals, your long term goals and any life events in between. You may hope to welcome children or grandchildren into the world, and wish to support them. Consider budgeting, and targeting your spending towards items or experiences that bring you joy. There is a stark, yet fine difference between frugality and prudence. Consider your timeframes for each objective, and ensure that your capital is appropriately allocated to align with these goals. For example, you wouldn’t normally want to hold your pension fund in cash, yet save for next year’s house move by investing purely in global equities!

Financial Planning is now very much a professional service, and it is critical to seek out the advice of an Independent, whole of market advisor & planner to ensure that your personal goals and objectives are met in the most appropriate manner for you. On many occasions, this may involve the use of financial products such as ISAs, Pensions or Life Insurance policies – but not always.

Done well, financial planning is truly life-changing. Proper Financial Planning must be experienced to be understood. Remember, you want to neither run out of money, nor die with too much.

Life is not a rehearsal – ensure you make the most of yours….

Toby Evans, Independent Financial Advisor & Planner

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