IFP communications director Sue Whitbread shares her ideas on how you can make better decisions about money if you’ve got a comprehensive financial plan in place.
Back at the end of 2012, as part of the IFP’s Financial Planning Week campaign, a poll conducted for the campaign revealed that only 10% of respondents were likely or very likely to consider stockmarket investment in 2013 in the hope of gaining improved returns over those available from bank and building society deposit accounts. So far, it’s not been a bad year for equity investors on the whole but those holding cash on deposit continue to see its value dwindling in real terms. However, and even without that crystal ball, we know that sentiment and confidence are such important factors in determining how you invest your hard earned cash. So are there any clever ways to make better decisions when it comes to your finances?
The answer is yes! Behind it all is having a comprehensive financial plan. This will cover your goals in life, and link them to your savings and investments, planning for retirement, education, emergencies, major purchases, and insurance/protection needs too.
But aren’t financial plans just for older people? No, they’re equally important for those in their 20s, 30s and 40s to help prevent them from making financial mistakes. People who are financially successful are used to making smart decisions about money. It doesn’t happen by accident. The sooner you start then the sooner you know where you want to go and whether you’re on track to get there. The longer you wait, the more difficult it is to make that goal happen. It’ll also make you more confident with your money, with greater peace of mind coming from that new sense of discipline your plan will give you. You’ll notice how much more in control of your life you are than previously.
Having a plan in place will help you save more and build your wealth over time. You’ll be more likely to pay off your credit card each month and less likely to use short term fixes like payday loans. Making decisions about where to investment or save your money will be much easier to do when these are made in the context of your goals and the kind of risk/return trade off you’ll need to consider.
While you don’t necessarily need to work with a professional Financial Planner to create a financial plan for you, a lot of people do so to save themselves the time and energy of sifting through a lot of advice and facts and figures which can all be very confusing.
Also confusing is the myriad of names and titles that professional advisers use. Whether you’re after a financial adviser, financial planner, wealth manager or any other category of adviser, here’s a link to my ten questions I suggest that you can ask when meeting up with any professionals who you may be considering seeking advice from.
Whether or not you get professional advice, the important thing is to have a plan. Write it down, discuss it with your partner. And here’s the real secret. Review, Review, Review!