How to write a financial plan – Part 2

how to get to where you are going

Financial Planning is a bit like booking a holiday.  You know where you are, you know where you want to get to, now you need to work out how to get there.

Some people spend hours online researching and doing it themselves (and that is fine).  They will end up at the right destination but may miss out on a local festival or a good deal on flights because of a lack experience.  As an example my trip to Tunisia was slightly spoilt by the fact that we went during Ramadan when all the staff disappeared a few hours every day!

When writing a financial plan you may work out how much you need to save to accumulate the necessary funds to last the rest of your life but there has been no one to challenge your way of thinking.  No one to suggest a different destination because you can afford it, no one to suggest that you could afford to do a dream trip (or retire early in financial planning terms) 5 years early because you’ve worked hard enough for long enough.

It is not always easy to see the big picture.  A list of numbers on a piece of paper can be meaningless so we have found the use of forecasting tools (such as the sample shown above) can give real meaning to a financial plan – we like to call it our crystal ball.  It doesn’t guarantee what your future will look like and the assumptions used must be fully understood but it does add depth to the numbers.

Any financial plan is better than no financial plan but we would strongly recommend that you share this with someone you can trust, who will look at it for an outsiders point of view and challenge it.  For some this could be a close friend or family member.  For some they may prefer to use the services of a financial planner.