How should I plan for my future financially?

It’s never too early or too late to start planning for your future financially. Although it can seem daunting, financial planning is really just an ongoing process that helps you make good decisions about your money, and helps you achieve future goals.

Creating a financial plan is important because it allows you to make the most of your assets, no matter how much you may or may not have, helps you plan effectively for the future, and safeguards against any unplanned emergencies.

Here’s what you need to know about planning for your future financially.

Set yourself financial goals

Financial goals look different for everyone, but a good starting point is to ask yourself some important questions, such as what you want your life to look like in five, 10 or 20 years’ time? Do you want to own a house, get married, have children, retire early?

When you have something to aim for then saving towards it becomes easier. Concrete goals broken down into several steps also become more achievable.

Track your money

What does your monthly cash flow look like? Knowing what’s coming in and going out is essential to developing a sound financial plan. Can you pay more towards a credit card or increase your monthly savings? Develop a realistic budget that accounts for your needs (including things like housing, utilities and food), and your wants – such as dining out and entertainment – and then put the rest towards savings or paying off debt.

Knowing exactly where you stand with cash flow can also help you more accurately plan for the short, medium and long term.

Plan for emergencies

No one likes to think anything bad will happen, but having money put away for small emergencies means you won’t suddenly fall into debt or off course.

You can start with a limited amount and build the pot up from there. Small emergencies might be things like an unexpected plumbing or car repair bill. Ideally, you could have enough put aside for one month’s basic living expenses, but anything that covers the unexpected is a good idea.

Good credit gives you options when you need them, like the ability to get a decent rate on a car loan. It can also boost your budget by getting you cheaper rates on insurance and letting you skip utility deposits.

Consider taking out insurance for accidents or illness so that you and your loved ones are protected if you are unable to rely on your income.

Do you need financial planning help?

A financial plan isn’t fixed; it changes as your circumstances change, so you should think of it as a tool that you can adjust as your life evolves. Major life events such as getting married, starting a new job, or coming into an inheritance can have a big impact on your future financial goals and how you plan to achieve them.

You don’t have to go it alone, either. Expert financial planners can help you develop a road map for your future, and check in regularly to make sure you are on track. McSherry Halliday has a team of financial experts who can help guide you towards your goals, no matter what stage of life you are at.