A financial plan that works for you

Written on the 24 January 2023 by Parkside InvestorPlus

As of January 2023, so much has happened in the last few years that has impacted our lives – pandemic, war, rising inflation, rising interest rates, and rising cost of living – just to name some.

Generally, we all accept that having a sound financial plan for achieving financial goals, investments and retirement is the right thing to do.

However, given the global events of the past years, you could be forgiven for ditching any plans you may have had simply because of the ever-changing landscape of our economy and that of the worlds’.

If there’s one thing we’ve learned, trying to second guess world changing events is a waste of time, effort, and energy.

Rather, putting that time, effort, and energy into developing your financial plan is much more realistic and beneficial – and importantly, ensuring your plan is flexible enough to accommodate major unforeseen events – in other words, be prepared for whatever may come.

The importance of financial planning

All of us hope to achieve the many life goals we have, and it takes money to achieve most of these goals.

So, to ensure you have the funds to fulfil your dreams, goals, and aspirations, it is vital to create a financial plan.

A financial plan is a process through which you can analyse your current financial situation and leverage it to create investment strategies that can help you fulfil your life goals.

Without over complicating, the steps to setting up a solid yet flexible financial plan include;

First, make sure your investment plan is sensible and based on evidence based financial science.

Second, make sure it’s realistic for you and your own unique situation. Even the greatest plan is no good if you can't stick with it during tough times.

Finally, invest in markets in whatever asset mix is right for you – and importantly, those that you understand.

Too often mums & dads go after the next shiny objective in the hope to accelerate their financial gains – think cryptocurrency, exotic metals, and even up and coming tech companies.

If you’re not sure, this is when you need to speak to a professional wealth/financial advisor who will not only provide valuable insights, yet also delve deeper into your ambitions and goals so that they can suggest the best plan for you.

Setting up a financial plan is only the first step.

Financial planning – an ongoing process

It's important to regularly monitor your plan to ensure it's still working for you and update accordingly when needed.

It’ll be worth your while to sit down once a year with a trusted financial advisor or planner to review your plan and adjust if necessary – this is where flexibility comes into play.

Remember, staying on track with your financial plan will help you reach your financial goals in the long-term.

A re-evaluation of your plan should start by looking at where you started and where you are now.

Take a moment to review your income, debt, expenses, investments, and net worth to determine if any changes need to be made.

Then, consider initiating action steps like creating a budget or emergency fund that aligns with your goals.

It is also important to set both short-term and long-term objectives so you can evaluate how well your financial plan is working for you over time.

Finally, update your plan as needed when life changes such as career transitions, marriage, parenthood, illness or retirement occur.

Again, a financial advisor will help guide you through the process and answer questions along the way.

A comprehensive financial plan should combine multiple steps like those above, providing you with a roadmap of success over the long-term.

Implementing the right actions now will help you reach your future goals with greater confidence.

If you don’t have a financial plan and would like to start, Parkside InvestorPlus can help you get started, or even if you a plan and feel it’s time to review it, speak with us.