Why your financial plan is all about you

Four steps to ensure that your financial plan is as unique as your goals in life

No matter how much money you have nor how old you are, every adult needs a financial plan. Working with a financial adviser may help you to maximise returns on your investments, but financial planning is about far more than calculations on products and returns. It is about you.

According to Craig Kiggen, the Managing Director at Consolidated Wealth, a financial plan is simply a map to reach your goals. “Everyone wants to have more money, but money is not the goal,” says Craig. “You need a financial plan to reach your life goals; money is just the tool that makes this possible.”

Do you want to retire early and travel? Do you want a beach cottage? Perhaps you are saving to send your children to university. These are life goals that require a financial plan.

“You need to know where you are today and where you want to be tomorrow. Your financial plan is what connects the two and it is as unique as you are,” Craig explains. “Deciding to start on the journey to achieve your plan marks a fresh beginning with your money. It means that you’re setting out to accomplish a goal that will change your life for the better.”

So how do you start? Craig shares his top four recommendations for putting together a goal-driven financial plan.

1. List your goals

Having goals is the foundation for your financial success. You have to know what you want to accomplish in order to achieve it. So clearly define and write down all your financial goals. When you start putting thoughts into words, they will become your long-term motivation.

2. Categorise and Prioritise

Now categorise your goals based on a timeframe. Generally, financial goals less than three years are short term goals. Goals with a four to seven year time frame are medium-term goals and those that will take seven years or more are long term goals. Categorising your goals will help you to build a roadmap, and they will help your financial adviser to select the right products to deliver on your different time frames.

3. Fixing a target date

The next step is to fix a target date for each of your goals. But how do you know in advance the date of your daughter’s wedding? Identifying a target date will influence your thought process and your mind will start running a countdown. So, once you’ve made up a date, you need to determine how much money you will need. For example, if you are planning for your son’s university education which is still 10 years away, you need to calculate the cost in today’s prices. Then you need to adjust for inflation. Now you have the future value of your target.

4. How much to save?

Once you have determined the future value of the goal, you can decide how much you need to save or invest in order to reach the target amount. Initially, you may contribute less than is needed, but you will be able to increase this contribution based on your annual income growth. If you do this year after year, then eventually your financial goals will become reality.

So, whether you are close to retirement or fresh out of university, wealthy or just getting by, you can use these simple steps to put a plan in place to ensure your financial future. Once you know what you want to achieve, Craig recommends working with a financial adviser to create a plan that’s tailored for your individual situation.

Craig concludes: “For us, financial planning is about understanding each and every client, what matters most to them, their goals and their relationship with their money. It’s about developing a holistic, integrated plan attuned to their circumstances, needs and priorities at every stage of their lives.”


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