If you’re new to financial planning you might not know what to expect. What do you get for your money? Will it make your life better? Most people are aware of the pension and investment boosting power of working with a financial planner, but what about the less talked about emotional benefits?
The life-changing magic of cash flow planning
As a partner in a law firm and a parent, P sometimes struggled to balance her work and home life. Although she loved her job and enjoyed helping people, working long hours meant she didn’t always make it home in time for dinner with her children. She left some money in a drawer so her daughters could order dinner if she was late, but P noticed she had to keep topping up the money because she was so often late. By working with a financial planner to create a cash flow plan, she was able to explore her options and realised she could afford to spend less time working and do something different.
“I don’t think I could have made the decision that I had enough and I was able to walk away without having the cash flow plan done a few times. What if I did this? What if this pans out? What is the worst case scenario?”
P describes cash flow planning as “magical”.
A cash flow plan takes your current income, expenditure and assets and projects how things will turn out for you from a financial perspective. By working with a financial planner you can see what you need to do to create the future you want.
A cash flow plan gives you a glimpse into the future. While it can’t fully predict it, it can help you answer questions like:
- Am I on track financially?
- What more can I do?
- Am I saving enough?
- Am I saving too much?
- Could I change careers?
- Can I afford that big holiday?
- Could I support my child through university?
This is where the technical side of financial planning can bring emotional benefits. By answering these questions, cash flow planning can help you take action.
| Result | Benefit to you | Value to you |
| Plan shows you need to save more to build a retirement pot. | Education. You now know the changes you need to make. | Peace of mind from knowing once you’ve made these changes you are on track for comfortable retirement |
| Plan shows you could afford to work less or earn less. | Empowerment. It’s nice to know it’s always an option. | Opportunity to explore having more time to do the things that bring you joy. |
| Plan shows you are on track. | Reassurance that everything is as it should be. | Freedom to spend any leftover income guilt-free on valuable experiences. |
Seeing your own cash flow plan will help you explore what you need to do next. It might even open up new possibilities in your life:
R&J have two children. They live together in the UK, but J’s parents live overseas. One parent lives in the US, the other in Brazil. This means trips to see family are great holidays as well as valuable times to catch up with relatives, but these trips are a significant expense every year. Creating their financial plan showed R&J they were on track financially in the long term, which gave them the confidence to extend this summer’s stay by another two weeks and enjoy more precious time with friends and family.
Protecting against the unexpected
So let’s say you’ve worked with an expert and together you’ve made a financial plan. The next step is to stress test that plan. Life is unpredictable, so it’s important to make sure that whatever happens, you’re covered financially. At Women’s Wealth we explore the ‘What ifs’ for our clients to ensure they and their loved ones are protected whatever happens, bringing reassurance and greater wellbeing.
Fostering self awareness
Our behaviours around and attitudes to money are shaped by our upbringing, life experiences and personality.
At Women’s Wealth we run regular group coaching sessions using a framework called Money Habitudes. “Habitudes” are your habits and attitudes towards money. These sessions are a chance to explore your own personal relationship with money.
Some women tend towards being planners – these women tend to save too much. Other women tend towards being spontaneous – these women tend to save too little. It’s useful to know where your tendencies will push you. Once you know, you can decide whether you would like to work on changing those natural tendencies.
If you are a security-loving planner, you might be at risk of forgetting that money is a tool. One of the most powerful things money can get you is more memorable experiences in your life and the lives of those you care about.
Whatever your tendencies, becoming aware of them can be a very empowering experience and can lead to greater understanding and control of your decisions around money.
Conclusion – the emotional benefits of financial planning
I hope this blog post has highlighted the many ways good financial planning can improve your emotional wellbeing. If you would like to explore more about how it would benefit you, then please get in touch.
If you would like to explore how we can help you, you can book a time to talk to me here.