Planning your dream future

26th March 2022

We all have a vision of how we would like our life to look – putting a financial plan into place makes it more likely we will achieve it, argues Sara Benwell

Having a solid plan is the first step to achieving your financial goals. This might sound obvious, but many of us go through life without ever actually sitting down and working out what we want financially and how we are going to get there. We may know that we want to retire one day, or that moving house is a priority, but we rarely build a comprehensive plan that looks at all of these aims together and considers whether we are on track to meet them.

A good financial plan should cover everything from housing, pensions and wills to savings, debt and the cost of raising a family. It should include a cashflow forecast that gives a clear picture of your income and outgoings and what needs to change to help you achieve your goals. Importantly, it should also illustrate how different choices will change the outcome. This can be a powerful tool for making decisions such as whether to use spare cash to overpay a mortgage or save extra into a pension.

While it is possible to build a financial plan yourself, working with an adviser helps make sure you have modelled the different outcomes correctly. This makes sense – even the most financially savvy among us is unlikely to have all the answers when it comes to investment returns, inflation proofing, interest rates, tax efficiencies and so on.

When your car breaks down, you tend to call a mechanic rather than trying to fix it yourself. In fact, even if your car is plodding along nicely, you still take it in for regular MOTs. Financial planning is no different, and an independent expert will have the knowledge to make sure you are considering everything you should be.

Many of us only start thinking about financial planning when faced with a big change such as starting a family, going through a divorce, buying our first home or thinking about retirement. All of these are valid reasons for making a plan, but the reality is that starting earlier makes the process more valuable.

Alex Whitson, managing director at VouchedFor, explains: “Millions of people have used our website to find or research financial planners. Sadly, in many cases they leave it too late. Their dream retirement or legacy would have been possible, if only they’d put a plan in place ten years earlier. The sooner you create a financial plan, the greater the chance of you being able to achieve your goals.”

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