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Archive for October, 2014

Lifestyle Financial Planning – budgeting

Finding out about you and producing a cashflow forecast is great but all good plans need to be monitored.

One way of doing this is to use Xero cashbook on your personal money. You can set budgets on personal expenditure and track actual spending. This will make you more money conscious by helping to keep your important personal goals in mind on a day-to day basis.

The software includes bank feeds which pull information in from your bank and credit cards. This eliminates data entry and the “rules” feature makes allocating transactions even faster. After two or three months you will just by clicking the OK button in Xero to confirm transactions.

We can review your budgets every month, quarter or just once or twice a year, depending on what you feel you need.

Having a review helps holds you accountable and enables you to refine and develop your budget which can then feed back to the life plan.

The idea is that you will create an enjoyable and sustainable life where you maximise your happiness by focussing on what is most important to you.


Lifestyle Financial Planning – cashflow

Once we know what’s important to you we can move on and start to explore if your financial arrangements support your goals.

We do this by creating a cashflow forecast for your future, based on your current expenditure patterns. Without this we are you are just guessing and cannot be 100% confident that your planning is the best it could be.

The cashflow runs from today until your expected date of death and includes exceptional items such as:

  • Tax free lump sum from your pension
  • Downsizing your home
  • Expected inheritances
  • Gifts you plan to make
  • Expensive holiday’s holiday homes and boats


The cashflow forecast is very visual because it includes a graphical representation. This allows you to:

  • Understand how different investment returns and inflation will affect your goals
  • Have peace of mind that the financial decisions you make are the right ones
  • See how things would change if your business increased its profits by 10% a year
  • Look at the impact of downsizing and/or doing equity release
  • Understand what would happen if you were able to change your spending habits
  • See what would happen if you overpaid on your mortgage
  • Work out what would happen if you lived an extra 10 years


Ask yourself “would it be helpful to see what is about to happen in your future?”

For some this is scary because they feel they are looking into a black hole. But, this is an opportunity to be honest and (for some) to become financially mature.

Sometimes, to achieve your dreams you need to wake up…the cashflow forecast is the alarm clock!

Are you ready to wake up?

Lifestyle financial planning – you

The first part of lifestyle financial planning is finding out about you.

Interestingly, this sometimes means you finding out about yourself. How often do you get the chance to really think about what’s important to you on a personal level?

Most of us live a fairly hectic pace and rarely get 5-minutes to stop and think.

One of the ideas you can use to help you think is called the circle of life. But, with lifestyle financial planning we also recommend you think about (and question) your daily, weekly, monthly and annual expenditure.

Doing this helps us dig deep and find out what is really important to you.

For those of us who are lucky enough to have young children we often want to help them get through higher education and/or get on the housing ladder?

Other questions and topics that can arise are “when can I afford to slow down and work when I want to?” And, “what do I need to do to make sure I never run out of money?”

When you have all your financial and non-financial priorities sorted and organised you can start to think about and question your current expenditure.

Do you need to use the car for all the trips?

Can you waste less food?

How important Costa Coffee and other small luxuries are compared to achieving your dreams?

You can also think about your life choices. Could you get more enjoyment from simple pleasures than convenience spending? Maybe you consider cooking for friends and family at your house rather than going out for dinner.

Does your current expenditure give you true happiness and well being? Or, are you like many people spending on auto-pilot, literally programmed by the TV?

If you’d like to review your personal financial plans get it touch.


What is lifestyle financial planning?

Lifestyle financial planning is a new approach to personal financial planning.

It’s not about selling you financial products like pensions and insurance but helping you get the life you really want. The aim is to help you gain control and master money.

This style of financial planning is both logical and emotional. The planner will dig deeper into your life and explore your relationship with money. The process challenges your relationship with money and helps you establish your personal goals.

It is important that the planner gets to know you and helps you identify what’s REALLY important. You will explore the things you want to achieve in your lifetime and define the lifestyle you want to enjoy both now and later in life.

The second stage is pulling together your numbers and doing some number crunching to produce a lifetime cashflow forecast.  This will give you a picture of your financial life based on your current expenditure.

Once you have this baseline you can play with the numbers and look at different outcomes from different expenditure choices.

The next stage is implementation where you do different things with money. This can include changing, buying and/or existing from financial products such as investment plans and insurance policies. It may also mean changing your financial habits – perhaps cutting back on some entertainment expenditure.

Finally, there is review. This is where budgets are set and reviewed. Reviewing your plan regularly connects your daily behaviour to your life goals.

When done well your life will change and so will your relationship with money.

Like any good plan it is adaptable and can be tweaked, like a ship readjusting the wheel to stay on course whilst the wind and sea constantly affect the ship. You’re your own captain of your financial ship…in control with a map.

So, will this style of planning benefit you?

It depends. Some people are not ready to face the reality of their situation. Others know they need to review their behaviour and welcome having someone hold their hand.

At Sackmans we like the saying “If you want your dreams to come true you need to wake up”. A dream needs a plan and a plan needs to be realistic, have specific targets and be reviewed.

The process usually takes 12 weeks. This gives you some mind time and means proper research can be done.