The importance of sticking to your financial plan

What Does Financial Planning Entail?

Financial planning is the process of creating a roadmap to achieve your financial goals, whether they involve saving for retirement, purchasing a home, funding education, or simply achieving financial independence. However, the true value of a financial plan not only lies in its creation, but also in the discipline required to stick to it.

As most of the world watched the Olympic Games in France in July and August this year, I was intrigued by how such an incredible spectacle is possible to achieve. From the opening ceremony to each athlete and their journey, to the very basic logistics of the event, hosting the Games is an immense undertaking that requires years of detailed planning and coordination.

The process generally spans over a decade, from the initial bidding phase to the actual event. Financial planning is no different. It requires detailed planning and coordination, and it should be viewed as a lifelong process.

 

Planning for Success

Here are a few tips to consider when thinking about your financial plan.

 

1. Find the right adviser

Choose a financial adviser that you trust and can be honest with. It doesn’t matter if you need to meet a few times before you decide you would like to work with him or her (a bit like choosing the right life partner).

 

2. Start early

The earlier you start, the better. Even if you can only afford to save a small amount of money to begin with, it is important to have a plan to work towards.

 

3. Select the right product

Understand the wide range of products that are available and how they can work for you. Think about it this way – when you plan a road trip, the road conditions and the destination will determine the type of vehicle you will travel in. You wouldn’t go on an offroad trip in a sports car. Similarly, investment products are vehicles tailored to assist you in reaching your specific financial objectives.

 

4. Remember that circumstances change

Your financial plan is dynamic and will change as your circumstances change, so engage with your financial adviser often to ensure your plan remains up to date.

 

5. Stick to the plan

Keep to the financial plan you have created with the help of your financial adviser. They will also act as a coach to guide and encourage you to adhere to your plan in order to meet your financial goals.

 

In Conclusion

Sticking to a financial plan is essential to achieving financial stability, maximising wealth and minimising stress. While it requires discipline, and sometimes involves difficult choices, the benefits far outweigh the challenges.

By committing to your plan, you ensure that your financial decisions consistently align with your goals, which will help pave the way to a secure and prosperous future. Ultimately, the discipline of following through on your financial plan is the key to unlocking the full potential of your financial life.

 

Frequently Asked Questions (FAQs):

 

What is financial planning? 

Financial planning is the process of creating a strategy or roadmap to reach your financial goals. This could include saving for retirement, buying a home, funding education, or achieving financial independence. It involves assessing your current financial situation, setting goals, and developing a plan to reach those goals.

 

Why is it important to stick to a financial plan? 

Sticking to a financial plan is crucial because it ensures that your financial decisions align with your long-term goals. A well-maintained plan helps you remain disciplined, navigate financial challenges, and stay on track toward achieving stability and prosperity.

 

Can my financial plan change over time? 

Yes, your financial plan should be dynamic and adaptable. As your circumstances change—such as a new job, changes in family situation, or shifts in market conditions—it's important to review and adjust your plan accordingly. Regularly consulting with your financial adviser can help keep your plan up to date.

 

How do I find the right financial adviser? 

Finding the right financial adviser involves finding someone you trust and feel comfortable discussing your financial situation with. It’s okay to meet with several advisers before choosing one. A good adviser will understand your goals, provide sound advice, and guide you in sticking to your financial plan.

 

When is the best time to start financial planning? 

The best time to start financial planning is as early as possible. The sooner you begin, the more time your savings and investments have to grow. Even starting with small contributions can make a big difference over time.