HOW TO ACE A FINANCIAL PLAN

While most of us have a grip on the basics, we’re generally not so confident when it comes to planning our financial futures. But making a plan can improve your monetary wellbeing, help you achieve your dreams and ensure your money will work for you. Fina

What you need to know

The last year has made us all take a closer look at our finances (40% of us have even started to talk about it at the dinner table*). But while most of us feel we are on top of the day-to-day management of our money, when it comes to planning for life’s financial trials and tribulations, the majority of women are unprepared, according to a recent report from Schroders Personal Wealth. Although 80% of women say financial planning would help them achieve the freedom to do what they want in life, more than half (54%) feel stressed and overwhelmed by thoughts of their long-term finances.

‘Financial planning is something that everyone should take seriously,’ says Kevin Moore, director of global business development at financial services body CISI. ‘Women often face different financial challenges to men – tending to earn less (with a pay gap of 15.5% in April 2020) and live longer (with an average life expectancy of 83.6 years to men’s 79.9 years in 2019). Financial planning can help you consider how to set both short and long-term life goals and plan for retirement.’

So, whether you’re looking to retire early, be debt-free, grow your wealth, plan for the unexpected, or help your children or grandchildren, you’ll need a good financial plan to get you there.

planning journey,’ says Martin. ‘Don’t constrain yourself; just think about all the things you have not had time for and then work out what financial resources you have or could have.’

Martin says people are often ‘pleasantly surprised’ to find they have more than they realise as soon as they start planning. ‘This could be from a generous employer pension plan, increased property prices or investment returns, for instance,’ he says.

 What Martin tells his clients: ‘I often suggest my clients use the Agingbooth app! You simply take a selfie and you can then age yourself by 30 or so years. Studies show it is a great trigger to get people thinking about their future needs. It works with my clients all the time.’

understanding of their starting point, irrespective of their goals.’

 Do an audit. ‘First, gather all your information, from what’s in your bank accounts to savings, investments, pensions and property and so on,’ says Claire. ‘Some people forget they have shares from past employers or other free shares, such as from banks when they demutualised. Think as far back as possible. See what your workplace or personal pension is worth, as well as your state pension. Chase down ones from past employers that you may have forgotten about.’ (See over the page for more on checking pensions.)

Claire adds that you should also take a look at what protection you have, such as life insurance or income protection,

especially if you have dependants who rely on your income. You may get some of these benefits from an employer. ‘Once you have done this, you’ll have a greater understanding of how much money you have for those goals,’ she says.

 Know your costs. ‘Make a list of your debts and expenses, too: credit card bills, mortgage, car loans,’ adds Claire. ‘When I ask clients what they have and how much their life costs, they often don’t know. But only when you have these figures can you start making a plan.’

 What Claire tells her clients: ‘Don’t forget the fun stuff. We’re great at looking at how much gas and electricity bills cost, but then forget the costs of the things that make life fun. Remember to include them in your expenses.’

 It’s good to talk. Simran adds that talking to friends and family can also be a useful way to understand what you could be doing with your money: ‘It’s a great way to start thinking about financial planning, just by asking people what they are doing. We still see money as a taboo subject, but don’t be afraid to open up the conversation; it can really help you think about your goals.

‘However, if your friends and family offer specific “advice”, take it with a pinch of salt, as they will not be looking at the whole picture as a planner would,’ adds Simran.

 What Simran tells her clients: Keep it simple. ‘Don’t overwhelm yourself. You really don’t need to have every detail planned out. Just keep it bite-sized, otherwise you will not get anything done.’