When asked if you have a financial plan, many people answer ‘no’. However, if you have goals for your future, you need a financial plan in order to make those dreams a reality.
A financial plan identifies your incomings and outgoings and works out the steps needed to achieve your financial goals. It will highlight your cashflow (incomings and outgoings) along with any debt you have, investments, savings and pensions.
Do I need a financial plan?
Having a plan makes life goals less daunting. The plan will focus on short term steps that you might need to consider in the future and set out financial milestones so that you can see how you are progressing towards your goals.
The main reasons people set up a financial plan is to reach these common goals:
- House deposit. You will need at least 5% of your home’s value saved as a deposit. A financial plan can help you identify how you can start saving small amounts to build up this pot.
- Wedding fund. Getting married is not cheap these days! Setting up a plan helping you to start saving for this big expenditure will mean that you can start your married life without any major debt.
- Starting a family. Raising a child can set you back £160,000 according to various research. Early planning will help you factor in school fees to student loans.
- Retirement. You can never start too early when it comes to pension planning. Think about what retirement looks like for you and put goals in place to achieve this.
- An emergency fund. You should aim to have at least 3 months’ worth of expenses saved for emergencies such as losing your job, big home repairs etc.
Everyone should have a plan. By taking the first step to planning for the future and creating a plan will help you feel more in control of your money and your future.
How can I create a plan?
We can help you create a financial plan for the future. We can provide you with guidance and advice and talk you through the pros and cons of different options available to you. It is important that your plan is shaped to fit your goals, your budget and your lifestyle. We advise our clients to re-visit their plans with us every year because there is likely to have been a radical change in your life during that time.
If you would like more advice about how to set up a financial plan for the future, please get in touch.