How To Worry Less About Money
August 12, 2021 - 4 minutes read
Posted by Claire Parker
Money worries affect everyone, even if you’re relatively wealthy. Whether you’re 30 or 50 and regardless of how much you have in the bank, you need to understand how much money you need – as it’s the thought of running out that causes sleepless nights.
As well as giving you peace of mind, knowing how much is enough will enable you to live life to the full now. Plus, it will help you to know when you’re likely to be able to stop working – most of us want the option to finish at some stage, even if it is a few years away. Of course, if you’re 20, you’ve got plenty of time but if you’re in mid-life, you will want to be able to answer this question sooner rather than later.
Of course, understanding how much money you need can be incredibly difficult. So difficult, in fact, that we would encourage you to download a book on the subject! Fortunately, it’s an easy read, written by Paul Armson who is something of a guru in the financial planning industry. Paul shares our life first/money second approach to financial planning and has kindly allowed us to distribute copies of the book. Download here or request a physical copy to be sent by post.
Many people believe they know how much is enough, but few have done the detailed work to know the true cost of their current and future lifestyle. Having specialised in financial planning for more than 20 years, we can safely say that a feeling of certainty when it comes to your money can be incredibly liberating. It’s the thing that stops you lying awake at night – and perhaps more importantly, allows you to do the things you want to do whilst you’ve still got time.
What’s Your “Enough”?
Wherever you are in your journey – whether you’ve achieved your financial goals or are still building your wealth – you’ll need to know the answer to the question ‘how much do I need?’ Everyone’s idea of enough is different – some people want a modest lifestyle, others want to live large with all the bells and whistles. It doesn’t matter which category you fall into, what’s important is that you understand your needs and have a financial plan that allows you and your family to live as you wish. After all, life is very short, this is not a rehearsal.
Enjoying Your Wealth
It’s not uncommon for us to work with families who have a surplus of wealth but no idea whether they can afford to spend it. This is where a tailored financial plan – we call it a WealthPlan™ – can make all the difference.
With WealthPlan™ comes the use of our lifetime cashflow modelling software to get an accurate view of how different decisions will affect your financial wellbeing. It’s a great tool that allows you to experiment with different choices before you actually make them. If you committed to paying private school fees for your grandchildren, would that limit your options in future? If you splashed out on a dream car, holiday, yacht, would that jeopardise your family’s security? If you bought a second home in the country, would you be able to afford the upkeep of your main residence?
Confident Financial Decisions
As you can see, the clarity that comes with a good financial plan enables you to be confident with your decisions which, ultimately, means you can live better. Even knowing you have the financial freedom to make certain choices can make you happier.
Calculating how much you need to facilitate your desired lifestyle isn’t as simple as saving as much as you can. Knowing your number means you can take positive action to implement a financial plan that will lead to the right amount being available to you when you need it.
And positive action doesn’t always mean working harder, it might mean rearranging your pension arrangements, savings and investments. It might mean reviewing your fixed assets. Or, if you’re a business owner, it might mean altering your strategy so that you can increase its value. It might even be a case of putting in place the right protection arrangements so you can hang on to your wealth rather than see it erode.
Take Positive Action
The fact is, the sooner you create a financial plan, the better because it means you can make decisions that underpin how you wish to live both now and in the future. And this is infinitely better than adjusting your finances to suit the lifestyle you can afford.
In the meantime, please do download or request a copy of Enough – enjoy!