Building Your Own Financial Plan

Building Your Own Financial Plan

As the saying goes ‘failing to prepare is preparing to fail’

Building your own financial plan is the perfect way to prepare yourself for the future. Money is not everything in life, we all know that much. But with excess finance does come freedom to do what you want with your time, which is precious and limited. Just think, if you won the lottery tomorrow you would be free to do what you want wouldn’t you? Whilst the chances are that are ridiculously slim, building your own financial plan is something you can directly and actively influence in real time. Your finances are in your hands.

There are many factors to assess when it comes to finances and it can be tough to know where to start. From investing to buying a property and even preparing for retirement.

It’s a lot to consider and sometimes it can be difficult to know where exactly to start. Let’s look at some of the topics in more detail below…

Creating a financial plan from scratch

It can sound like a daunting process. When building your own financial plan the best thing to do is often break it down into smaller, more manageable steps.

1. What are your goals?

It takes time and work to accumulate wealth. You must define early on what your long-term objectives are for any endeavour, whether it is growing a business or acquiring a new skill. It’s the same when it comes to developing wealth — setting financial goals is critical.

Your efforts will become disconnected and even unclear if you don’t have a goal. It is only possible to keep track of your progress toward accomplishing a goal if one is set in the first place.
It’s quite satisfying to be able to track your progress, and it’ll help you stay focused. Setting financial goals is essential to financial success. Once you’ve set your goals you can then write and follow a road map to realise them.

Your objectives are personal and one-of-a-kind. Perhaps you want to start your own business and pursue a longtime dream, or perhaps you desire financial security and the assurance that you will be able to leave a legacy to your loved ones. It’s a good time to figure out if you have enough to fulfill your goals or if there’s a gap once you’ve specified your goals and are clear on your existing condition. This is a difficult undertaking because there are so many variables to consider, such as inflation, taxes, and growth rates.

2. Where are you now?

Cash flow planning is a business concept, and every business owner or finance director is familiar with the word. These same techniques can be used to plan your personal finances. As previously said, the first step is to determine each of your own objectives. When all expected future demands are taken into account, cash flow planning is most effective. While focusing solely on immediate requirements may appear to be more realistic, doing so can limit future alternatives.

Make a list or a spreadsheet of everything you have, including any assets, cash balances, investments, pensions, insurance policies, and any debts, such as a mortgage, credit cards, or loans, and identify where and how much you have. Examine your income and expenditures.

3. What do you need to do next?

Things can change quickly, as we saw with the coronavirus (COVID-19) epidemic. It goes without saying that your financial plans should not be considered static objects, and that you should examine them over time and on a frequent basis to ensure that you stay on track to achieve your objectives. As your circumstances change, you’ll need to adjust your financial strategies as well.
Regularly reviewing your arrangements is critical to ensuring that you reach your financial objectives and that all of your plans are current in light of changes in your circumstances and the broader financial landscape.

Reviews can also remind you to think about some of the items that you may have forgotten about, such as your Will, which may need to be arranged or amended. Maybe there’s a Lasting Power of Attorney that hasn’t been completed, or a life insurance policy that has to be placed in a trust. Life has a propensity of surprising us with unpleasant surprises when we least expect them, as we’ve all just discovered.

Getting on the property ladder

For many people, the most significant purchase they will ever make in their lives is the family home. Especially with prices rising in the last couple of years this decision has become more precious as often a lot of saving has gone into getting the deposit together. With the time it takes to build these savings up there is a special emotional attachment to them and this whole process demands the upmost of care and attention.

On top of the fact it is a big purchase, it is historically proven that property values generally go up. A property is an asset class that has withstood the test of time. On top of this if you get a capital repayment mortgage you pay down the debt over time with the property value going up. It’s a win win situation and should be at the forefront of building your own financial plan.

Preparing for the unexpected

Pensions and savings are likely to come to mind when considering financial planning. Protection, however, should be a key component of your financial strategy, despite the fact that it is sometimes disregarded. If you’re concerned that an illness or accident will leave you unable to pay your bills, there are options available to assist protect your income. While some people may be able to rely on state benefits as a safety net if they lose their job, for many people, the loss of income would be too great to sustain their level of life.

In many cases, families rely on both couples’ income to meet their monthly obligations, and they don’t consider the impact of losing one income on their level of living. Even while most individuals understand the importance of purchasing life insurance to pay off their mortgage if they pass away, they may not consider how their family would continue to pay their bills if they fell ill or injured and were unable to work for an extended length of time.

Would you and your family be able to keep paying the bills if something happened to you? Many of us are thinking more carefully about how to safeguard ourselves and our families from financial issues as a result of the coronavirus (COVID-19) outbreak.

This isn’t just about having long-term savings and investments; it’s also about ensuring that you and your loved ones are taken care of in the event of a disaster. Have you estimated how much money you and your family would require if you were unable to work? This should include your savings as well as any other sources of income.

A few ways you can look at this are with income protection insurance, critical illness cover and private medical insurance. These all have their own benefits and drawbacks. Our advice on insurances is free of charge and it pays to get a professional advisor to tailor an insurance plan specifically for your needs as no one person’s circumstances is the same as the next.

What’s happening with inflation?

When it comes to your financial performance, understanding inflation is critical. If you don’t account for inflation when determining where to place your money, whether it’s in savings accounts or investments, your wealth may diminish over time. COVID is largely to blame for the present increase in inflation. Consumer confidence has risen as lockdowns have been eased, releasing pent-up demand. At the same time, production and delivery constraints are pinching supply of everything from building materials to food. Some prices have risen as a result of the supply and demand imbalance.

Inflation is defined as a change in the price of goods and services over time. The Office for National Statistics stated on August 18 that the Consumer Prices Index measure of inflation slowed unexpectedly in the year to July, falling to the Bank of England’s objective of 2% from 2.5 percent in June.

Some people’s anxieties about inflation may have been mitigated by a long period of low inflation. However, there is a growing awareness that severe inflation is on the way, lowering your purchasing power and limiting what you can buy with your money over time. Some savers and investors may misjudge the impact of inflation on their assets. Money kept in the bank usually earns interest, but if the interest rate is less than inflation, money or purchasing power is effectively lost.

How a financial advisor can help

When it comes to building your own financial plan, who better to assist you than an experienced professional. Here at True Advice our independent financial advisor Tony has over 35 years experience helping clients with these very issues.

He can use this wealth of experience and knowledge to assist you today. All you have to do is contact us directly and get building your own financial plan today.

Regulatory Statements

Equity Release

Equity Release plans are not right for everyone and it is important that you fully consider your options and receive independent financial advice before making a decision. It is also important that, if you do decide to use an equity release product, you choose one that meets your needs.

Remember that taking an equity release plan is generally a long term option. However, there are flexible plans available that may fit your varying needs and some will allow you to repay in the future without penalties.

Buy to Let Mortgages

Some Buy to Let Mortgages are not regulated by the FCA.




All investments involve a degree of risk of some kind. This section describes some of the risks which could be relevant to the services we provide you. We may provide further risk information during the course of our services to you, as appropriate.

Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets outside our control. Investments and the income from them may go down as well as up and you may get back less than the amount you invested. Past performance is not a guide to future performance.

True Advice Financial Services is a trading style of TA and SE Hollom Ltd. Which is an Appointed Representative of New Leaf Distribution Ltd which is authorised and regulated by the Financial Conduct Authority : Number 460421.

Registered Office : New Leaf Distribution Limited, 165 – 167 High Street, Rayleigh, Essex, SS6 7QA