What Is A Financial Plan And How Can I Make One?

If you haven't created a financial plan yet, and you aren't sure where to begin, here are some simple tips to help you get started.

A financial plan identifies your goals, outlining the steps you need to take to reach them and is a key part of building a secure future.

To start, look at your monthly cash flow – what's coming in and what's going out – and understand what is truly happening. Be thorough with this and assess your expenditure. Are there any areas you are spending too much and could cut back? Are you on track to afford that special holiday, those home improvements or new car? Do you have an emergency fund tucked away in case you should need it?

Everyone's circumstances are different, but as a general rule of thumb we recommend following the 50/30/20 approach. This means that 50% of your take home pay should go towards 'needs' (things like bills, mortgage, utilities and recurring costs), 30% towards 'wants' (such as clothes, going out, having fun) and 20% on savings and/or paying back any debts.

A good financial plan takes into account your pension(s) too. Think about where your payments are going and if they'll be enough to support you in retirement if you continue doing what you are currently doing.

Similarly, look at whether your savings and investments are working hard enough for you. The financial landscape is constantly shifting, and what may have been the best way to maximise your cash a few years ago may no longer be the case today.

And finally, consider if you and your family would be prepared if something were to happen to you. This could be through savings or life and income protection insurances.

Once you've got a good grasp of each of these factors, you'll be able to get a clearer picture of what to do in order to achieve your goals.

If you would like some help understanding if you are on track to realise your future plans, contact us on 01978 806505 or mail@belgravewincham.co.uk to arrange a free 60-minute consultation. Alternatively, you can fill in our contact form and we will get in touch with you.


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