5 empowering ways to build a financial plan your future self will love

Valentine’s Day has just passed and it’s a time we traditionally associate with love and connection. But, this year, I wanted to shift the focus. Let’s talk about showing some love to the most important person in your life: your future self.

More than chocolates and flowers, a truly powerful act of self-love could be taking the time to build a financial plan that is designed to set you up for success and happiness down the road.

This isn’t about creating numbers and spreadsheets. It’s about helping empower yourself to achieve your dreams and create a life you truly love.

I’m going to share with you five actionable steps you can take to help build a strong financial foundation, which may very well be the gift that keeps on giving.

1. Define your dreams by clarifying your short-, medium- and long-term goals

One of the most important things you can do now is clarify your goals.

Financial planning isn’t just about numbers; it’s about aligning your money with your values and aspirations. Perhaps you have already given this some thought, but it could help to revisit your goals to ensure they still resonate with you today.

It may serve you well here to visualise your short-, medium-, and long-term goals. Think of these as stepping stones on your path to financial fulfilment.

Short-term goals might include paying off a specific debt, building an emergency fund, or taking a holiday abroad.

Medium-term goals, perhaps spanning 3 to 5 years, could be putting a deposit down on a property, starting a family, or returning to education to advance your career. These may require more planning and effort.

Finally, your long-term goals are those that could take more than 10 to 20 years to fully realise. This could include a comfortable retirement, travelling the world, or setting up the next generation for a prosperous future. Consider what lifestyle your future self would want to lead, and then start putting a plan in place to help you realise this.

Take some time to reflect on what matters most to you, and once you have some ideas, we can work together to build a personalised plan to help make them a reality.

2. Take a snapshot of your financial situation to find out where you stand

Before you can chart your course forward, you need to understand the financial landscape in front of you. Think of this as taking a snapshot of where you stand today.

This step is about gathering all the information you need to make informed decisions, and it may require taking a realistic and honest look at your current financial standing. Here’s how to start:

• Calculate all your sources of income, including investments
• Track your expenses and make detailed categories to see if you’re overspending
• List out all your outstanding debts, including their interest rates
• Tally up all your assets, from savings accounts to property.

This should give you a relatively clear picture of your overall financial situation and it’s the foundation upon which you can begin to build your financial plan.

Having this information to hand could make it easier to create a strategy that aligns with your goals.

3. Help grow your wealth by saving and investing for your future

Saving and investing are fundamental in helping you to achieve your long-term financial goals. Remember, this is not about building your long-term wealth quickly – aim to create a secure future and make your money work for you.

You can also work on building short-term savings and long-term investments at the same time, though the value you’re putting in may differ depending on your current financial picture. Here’s how to balance both.

Build short-term savings as a financial safety net

In the short term, consider prioritising a basic emergency fund if you don’t have one already. Having at least 3 to 6 months’ worth of living expenses saved in an easily accessible way could act as a financial safety net, preventing you from tapping into your long-term investments when unexpected events arise.

Help long-term investments grow by contributing more where you can

If you have your short-term savings where you want them, then you may want to consider funnelling more of your surplus income into your investments.

You can still contribute small amounts to other savings pots to keep them topped up, but investing could be a good opportunity to grow your wealth over the long term and leave a legacy behind after you pass away.

It’s also important to note that you can start investing at any level. Every contribution makes a difference, whether regular payments or one-off lump sums. Remember to review your investments regularly to ensure they still align with your goals and risk tolerance.

No matter where you are in your investment and savings journey, I’m here to help.

4. Clearing debt could make saving for the future easier

Debt can certainly feel overwhelming, but it doesn’t have to control your life. Efficiently managing your debt could be crucial for achieving true financial freedom.

Start by listing exactly how much you owe, including interest rates, minimum payments, and any associated fees. From there, you can consider whether it would be beneficial to reduce your overall debt burden.

Remember, not all debt is created equal. In this case, it can be useful to distinguish between “good debt” and “bad debt”.

You may take on “good” debt to achieve meaningful growth in your personal life and finances. This could include buying a property, paying for higher education or additional qualifications, or starting a business.

“Bad” debt is usually more short-term and can be relatively expensive. This may include personal loans and credit card debt, used to fund sometimes unnecessary expenses. This type of debt could get in the way of your financial progress, so it may be useful to repay these as a priority.

Creating a realistic debt repayment plan is key and remember that there’s no one-size-fits-all approach. Ultimately, work out how much you can realistically afford to pay each month and allocate those funds strategically, focusing on short-term, high-interest debts first.

5. Review and adjust your plan as needed to stay on track

A financial plan doesn’t have to be set in stone. It may even help to think of it as a living thing that evolves with your life. Just as your needs and priorities change, so too should your financial strategy.

After all, goals can shift and economic conditions can change. It’s essential to ensure that your plan remains relevant, and effective, and continues to serve your best interests.

Regular reviews are key to maintaining this. Annual reviews could be a good place to start but if you have a significant change in your life, you may want to consider an ad hoc or more regular review process.

That’s where I come in.

Get in touch

Your financial plan is a roadmap, not a rigid set of rules. I can help you align your finances with your goals, values, and aspirations and help you reduce any stress or anxiety you may have about your money.

Your future self will thank you for taking the time and effort to plan for your future wellbeing.

Email Marnel.Stafford@fosterdenovo.com or call 07305 970959 or 0207 469 2800 to find out more about how I can help you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Investments do not include the same security of capital which is afforded with a deposit account.