How To Get Your Financial Life In Order

29 Jun 2016 | Articles |

Wherever you are today in your journey along life’s pathway there are powerful reasons to ensure that your finances are in order. The value long term of having a sound financial plan extends way beyond any narrow concept of accumulating money.

A successful financial plan means peace of mind, enjoying lifestyle options, leading the life you want, both now and in the future and, most importantly, providing family security.

In our book, The Wealth Secret, we explored how finances truly interact with your life. The key element here is that money or wealth, on its own, is useless. It is what it represents or enables that is important.

This means that your financial plan has to be linked to goals or objectives. That is why – whatever your starting point today – you have to compose your financial plan starting with your current and future life objectives.

The first thing to do is to define what these are. Then you have to think about the balance between today and the future. This goal orientated, lifestyle-based approach is proven to work as the best basis of creating a successful plan. Because it distances the objectives from a pure quest for ever greater wealth and instead directly links it to your key life aims.

How does this work? There are variations, but one way is to investigate what it is you want to achieve and initially this can be fairly general, for example an early retirement or a wish to have a second home in retirement. A desire to make sure that care fees are catered for in later life or, in the shorter term, a determination to have at least two family holidays per year whilst the children are young.

It’s your life and what makes you happy and contented will be uniquely yours to dictate.

Getting your financial life in order does not start therefore with anything particularly financial. For example, if you want to test out whether you can re-mortgage to save monthly mortgage costs is not an inherent part of getting your finances in order.

Many people see the functional aspects of money management as their financial plan. This is a mistake if you are striving to create wealth. Those functional aspects are things that follow and are led by a much broader approach.

The way to get your finances truly in order is to construct a plan which links your goals to your current position, to work a methodology of meeting those goals, carefully balancing the short, medium and long-term needs.

This requires producing a step by step plan which is carefully crafted from the back to the front. Determine your future wishes and turn these into goals; see what is required to meet these; look at what needs to be saved or invested, the rates of return required, how you need to balance spending and saving.

Our financial planning solutions commonly include personal cash flow forecasts, these are long-term assessments of your savings, investments, and income and expenditure patterns all adjusted to your needs over the years. This will highlight what you need to do and when, what will happen if you get different rates of return on your savings, what the impact of different retirement ages are, how inflation rate changes might affect your plans and much more.

The cash flow forecast highlights the risks, potential shortfalls and demonstrates different scenarios. It also produces enlightening factors, pinpointing the key steps. People who undertake this exercise will feel they are really getting to see their picture and it helps them make valuable decisions.

Financial planning is a much broader concept than simply engaging in a set of decisions about what to do with your money. It is a comprehensive assessment of your finances and your life requirements. In this respect, if you wish to get your financial life in order we strongly recommend you take time out to explore lifestyle financial planning and let us help you go through this exercise.

If you would like to speak to a member of our specialist advice team, please fill in the form below and we will be in touch.

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