PERSONAL FINANCE
Personal finance t
his month’s article is directed at visitors to the area who may have picked up a copy of by
the Dart but might equally be of interest to anyone considering a major change of direction in their lives. It’s inspired by a number of conversations I’ve had
with tourists or those with a second home in the area, when I’ve been told how much they would like to live here. ‘great idea’, I reply, ‘it’s a fabulous place to call home! When are you thinking of doing that?’ In the main of course, their wish is exactly that
– a vague desire - rather than any kind of properly formulated plan. now, there’s nothing wrong with daydreaming but assuming you were serious, what would it take to turn this dream into a reality?
Aims & Objectives the starting point is to be really clear on your aims and objectives for the move. In simple terms the ‘aim’ is your desired outcome, whilst the ‘objectives’ are the means by which your aim is achieved. Would you like to work and save hard in your current job and then retire in five years’ time to enjoy messing about on the river? Or perhaps you imagine a different lifestyle for you and your children right now, together with an alternative, less stressful career. What, exactly, might this mean in practice? Whatever your motivation, a financial planner can
work with you to articulate your desires and then help you understand the cost of the life you’d like to live. proper financial planning like this is powerful stuff!
It’s certainly not about investments or products and it may lead you to some unexpected conclusions.
Priorities & the Art of the Possible Financial planners will often use a process called ‘lifetime cashflow forecasting’ to help you ascertain whether your aims and objectives are achievable or, as is often the case, whether you will need to modify and prioritise your plans. the best financial planning software is very visual and so can also be used as a tool to help you see and test alternative scenarios: what might be possible? If you are able to view your dreams and aspirations
SO, YOU WANT TO MOVE TO DARTMOUTH? by Ian Thomas
Pilot FINANCIAL PLANNING.
in the context of possibility, it becomes much easier to discuss them with your partner and your adviser and to firm up your plans.
Getting Specific Once the plan has been agreed, reviewing your spending, together with your financial arrangements like investments and pensions, becomes a much more meaningful and productive exercise. Are your finances being optimised to meet your
(well defined) objectives? Are you saving enough? Or perhaps you’re spending too much on things that aren’t really making you any happier? With a clear vision of your future acting as an
incentive, you are much more likely to stick to your strategy. money becomes a means to an end, rather than an end in itself.
Contingency Planning It’s great when things go to plan, but what would happen if a disaster struck? Clearly there are some eventualities that you are unable to insure against, but death, illness or an injury that prevented you from earning, for example, are not amongst them. Again, lifetime cashflow forecasting can simulate these events and help ascertain whether you are under-insured or (not uncommonly) over-insured.
Course Corrections Finally, it’s important to recognise that financial planning is a process, not an event. Your objectives may well change over time, just as the world around us will move on too. regular reviews of progress against your plan will stop you from veering too far off course; that is unless you want to, obviously!
pilot Financial planning is authorised and regulated by the FCA. This article is intended to provide helpful information of a general nature and does not constitute financial advice.
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