Often the eureka moment with our clients is the visual demonstration of their finances using a cashflow plan.
You may have a perfectly good strategy for making regular savings and tax efficiently achieving growth on your ISAs and pensions but, until you begin to relate these finances to the things you want to do with your life and for your family, you don’t have a plan.
Balancing life with your finances
Tying these things together can be a complex task, with multiple moving parts, competing priorities and questions. How much will I need to invest now for an event in the future? What will I be able to afford in my retirement? Can I afford to be as generous as I’d like to be? Can I do all these things while being tax efficient and ensuring my family will be financially secure if I die or if illness cuts my career short?
Our Financial Planners are expert in guiding you through this process to create a financial lifetime plan. An integral part of our service is interactive cashflow planning that enables us to work collaboratively with you to build a unique plan that will help you visualise your financial future and the steps to take to achieve it.
Capturing your financial situation
Cashflow planning brings together the ‘hard facts’ about you, such as income and expenditure, assets and liabilities, then a lot of complex maths is run in the background to account for investment growth, inflation, and taxation. Of course, this is all pretty meaningless until we include the people and begin to understand their aspirations and add those to the plan.
There’s no denying that financial planning can be a dry subject and that many of us engage much more with visuals than plain text and numbers.
Over the years I have found that the visual nature of our cashflow planning has really brought our client meetings to life. Seeing a plan evolve on screen together makes for a truly collaborative planning experience, our clients see the possibilities opening-up before them and questions start to fly; sometimes to the planner, sometimes to their partner – could we really do that thing we didn’t dare think about before?
The outcomes of cashflow forecasting
Of course, sometimes we must deliver a dose of reality, such as when a client is not on course to meet their goals. While this doesn’t make for such a happy conversation, the value is probably even greater and hopefully there is scope to help with good planning and financial discipline.
Cashflow planning is based on a whole host of underlying assumptions. At Paradigm Norton we work hard to ensure that those assumptions are realistic and sensibly cautious but, in the end, they will be wrong! Anyone who tells you different is not to be trusted.
Your expectations of what will happen in in your life will be overturned, goals will change, investments will not provide the returns predicted – sometimes more, sometimes less and they will be delivered erratically. Tax rules will change, often, and who knows how long you will live?
So, what’s the value of having a plan?
Well, it’s the best, educated estimate we have and it gives you a direction of travel that puts you in the best position to help you achieve your goals. Like using a SatNav on any long journey, you would expect to be re-routed around congestion or road closures, to choose diversions along the way to see some sites and even decide on a whole new destination (tell me if I’m taking the analogy too far?). That’s why we don’t wave our clients off with a detailed plan, a product or two, and wish them a nice life. Financial planning is a journey, our relationship a long-term service. Plans are to be reviewed and renewed, tested and revised as necessary, and that’s what we will do together.
If you would like to speak to a qualified Financial Planner about this, or any other matter, please give us a call today on 01275 370670 0r 020 7269 7960. We would love to hear from you.
This article has been published for educational purposes only and should not be considered investment advice or an offer of any product for sale. This article does not represent a recommendation of any particular security, strategy or investment product. Cashflow forecasting is not regulated by the Financial Conduct Authority.