Don’t be overwhelmed, focus on what’s important

When faced with a big list of what needs to be done to achieve their goals, people tend to get overwhelmed with the amount to be done to tick every box.

If you are at the very beginning of the planning process, the “To Do” list will be longer than you can possibly achieve in one year. The follow is just a taster of some of the different savings and insurances that people need.

  • Create Emergency fund
  • Have adequate life cover
  • Implement income protection cover
  • Implement specified illness cover
  • Start a college fund for the kids
  • Save for retirement
  • Look at business succession plan
  • Start savings for paying for daughter’s wedding
  • Savings to achieve short term goals
  • Consider making extra  mortgage repayments

No wonder people people take a look at this and run a mile. But if you do nothing, all you have done is pay someone to create an expensive plan and you get absolutely no benefit from it. You are then leaving it to chance as to whether you achieve your goals or not.

Good financial planning recognises that not everything can be achieved at once. When you get that long list of things that need to be done, you have to prioritise. At planning meetings, I ask my clients the following questions:

  • Which goals are the most important?
  • Which goals are achievable?
  • What has to be done to achieve them?
  • When are they to be achieved by?

After going through the answers, it is agreed who has to do what and by when. It may take months or even years (I have yet to find someone who has saved for their retirement in 1 year!). As your priorities in life change, adjust the plan to suit your new circumstances, constantly tweaking it. But whatever you do, don’t do nothing!

And never be put off if the contributions required to meet your ideal retirement or education funds are simply more than you afford. Start with a figure you can afford and commit to increasing your premium each year. It won’t take long to catch up.