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An easy trick to kickstart your financial planning

planning for financial futureHow far do you plan ahead? Other than earmarking dates and destinations for holidays or writing a shopping list, I don’t really think about the future that much. I’m not alone because apparently over half of us in UK think only days or weeks ahead.

Such are the findings of research by Brewin Dolphin. They are professional financial planners, so naturally they see it as a bit worrying that most people live in the present tense. When you’re younger, with no responsibilities, it’s easy not to care about tomorrow. Retirement, marriage and children are all a long way off. The difference is, when you’re older, other goals such as pensions and mortgages may have replaced being on the guest list or scaling Kilimanjaro. Achieving those kinds of targets does require some forward thinking.

If this sounds like yet more nagging, you’d be right. Nagging though, so I’m often told by the rest of Team Minted, doesn’t work. And besides, how are we meant to have all these plans in place for our financial future when we don’t know what that looks like? I might win the lottery, get run over by a bus etc etc and all the other excuses I can dream up to keep my head in the sand.

If nagging won't work, nudging might do the trick and Brewin Dolphin have come up with a good one. It’s very simple. It’s not even to make a plan. It’s just to write a letter – to your future self – about your hopes and dreams. The idea is that it can help you to identify your life goals. Once you've done that, it's easier to do the financial planning necessary for gaining them.

To get you started, there’s a questionnaire on their website here with some thought-provoking questions. They include talking points such as:

1. Imagine you are deep in old age – what does your family look like? Are you married? Do you have children or grandchildren?
2. Where do you live? Do you still live in the UK? What is your property like and do you own it?
3. Where did you travel during your life? Did you see everywhere you wanted to? How important was it to travel the world?

What would be your answers? Personally I would like to be 72 with six grandchildren living (with Mr Minted, of course) in a hut on a beach in Thailand – who knows, it might actually happen! Even if you don’t write the full letter, just considering the questions might just help you formulate the goal, not only for life in retirement but also your lifestyle now.

How are you saving for retirement? See our beginner’s guides to pensions here and check out our tips to finding an independent financial adviser here.

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Saturday, 20 April 2019