Talking about money and the benefits of Financial Planning is a task most couples avoid but the longer you delay, the harder it can be to work through all the moving pieces involved with your family’s financial life. It often goes beyond just the numbers and involves a deeper conversation between loved ones, which can unearth differences in priorities that should be addressed. Putting a formal financial life plan in place can make this journey a lot easier and has a number of benefits involved when working with a trusted professional.
Clarity on your goals
People often know what they would like to achieve over the next 6 months, but a longer-term plan is often seen as too far out to worry about, even though the steps you take now all work towards a bigger end goal. As part of putting together a financial plan, you have the opportunity to formally sit down to discuss these goals and how these interrelate with your overall purpose throughout your lives. Quite often, each partner will have their own ideas when it comes to what they want to achieve, so it’s important to capture both sides in conversation to ensure that everyone is on the same page. A financial adviser is there to facilitate these conversations and can provide some much-needed objectivity and mediation, which is one of the main benefits of financial planning.
Better management of your household income
It is not uncommon for a family with a decent level of household income to find it difficult to get ahead. Knowing what you spend versus what you earn and how best to structure your cashflow for success is a foundation to putting together your financial plan and will enable you and your family to start heading in the right direction. Prioritising what is important to you and making a few small changes could allow you to free up cashflow for another purpose such as investing or boosting your savings for retirement. Both can assist you in meeting important and key milestone goals over your life journey.
Confidence in investing
For those who have had a bad experience in the past with investing or are new to the game, a long-term investment plan can be emotionally driven and hard to start. A financial plan and guidance from a trusted financial adviser ensures that you’re investing in a tried and tested manner. Formal advice will give you the confidence to take those first steps and persist through difficult economic market cycles, which if investing alone may cause you to panic sell or buy at inopportune times. Leveraging off the skills and expertise of an advisory group will empower you to take control of your financial wealth and opens up the options available to you as you transition through different life stages.
Reduced financial stress and anxiety
At different points across your lives, you and your family may struggle to make ends meet and lack clarity on where you sit financially. A financial plan is fluid and generally adapts to your changing position over your lives. This can relieve you of unneeded stress and anxiety, which in turn improves the mental health and internal relationships of family members. A financial plan will also involve consideration of how best to protect your family against the risks associated with illness or injury and puts a plan in place on where you can best draw money from to see you through the hard times.
Someone to keep you honest and on-track
A financial adviser acts as your ‘sounding board’ when it comes to making important life decisions. They can take the emotion out of the crucial decisions you make, which can end up saving you thousands of dollars over the longer-term. Whether it be around investing, prioritising your goals or transitioning to a different stage of your lives, a trusted advisor can explain the benefits of financial planning to you.
Sean Hocking works with individuals and their families to provide peace of mind and clarity around their financial future. Having a roadmap in place which clearly articulates what’s important in the years to follow gives his clients the confidence to make clear and informed decisions throughout their financial life journey.