It is not a new dilemma that many today are not aware or educated on what personal finance is. Some may be aware of it but rarely practice it in their personal or business life. The only way one can benefit from knowing about something is to put it into practice.
Personal finance is an essential part of preparing for the future. Whether you are preparing to give your family a better life or simply preparing for your retirement, it is imperative that you understand what personal finance is and what it can do for you as well as how you can manage or practice it.
Personal finance is about budgeting. Budgeting can comprise of a person’s personal life, business, or work life. Budgeting requires that you be attentive of how much income you get and how much you spend. And it requires that you weigh your income versus your expenses as to whether you are spending your money properly or you are spending beyond what you can afford.
Whether you are planning to invest on your future education or further training or maybe you are planning to give a better life for your children, you will have to sacrifice so you could work, save, and get to the goals you’ve set.
“Life Time Cash Flow planning is a great way to see all your finances in detail, your own financial future, to enable those bucket list items to be ticked off before old age.”
So what is Life Time Cash Flow Planning?
A process that produces a detailed report that looks at income and expenditure expectations for you and your spouse/partner from now until a set age. It takes into account all the assets you hold now and will in the future, any potential inheritance and all the plans you have in life: holidays, travel, property purchases and sales, gifts to children, the list is endless.
Take into consideration your life goals and associated costs, a detailed cash flow plan can show you what effects your plan will have on your ability to live the life you want. Planning aims to:
- Provide clarity on your current situation and a valuable long term perspective
- Illustrate the extent to which short and long term financial goals can be achieved.
- Show the impact of ‘what if?’ scenarios. What if we buy the house a year earlier, what if we gift £150K to the children now and buy their home in trust? What if we have three holidays per annum instead of two? What is the effect of all this on our later years?
- Inform you about the impact of decisions such as ‘downsizing a property or retiring a couple of years early’.
- Help you stay in control of your financial future, assessing the impact of unexpected change on an ongoing basis.
- Review tax and investment planning to ensure that assets, liabilities and income are structured and distributed in the most tax efficient way.
All of this can help you make important decisions about your future. For example, whether you can afford that large capital expenditure, whether you can support private education for your children, when to sell a business, when and how to gift assets to your family and crucially how all these might impact on your own financial well-being.
Ask yourself what does my financial future look like? Enable those bucket list items to be ticked off before old age – book a FREE consultation with 1st Financial Foundations, call 01908 5230 420 or email us firstname.lastname@example.org we are always happy to talk.
* Please note that the Financial Conduct Authority does not regulate cash flow modelling.
Source: personal-finances.biz, the guardian