Along with polo, fine wine and opera, financial planning is often mistakenly regarded as the preserve of a certain demographic: the wealthy, socially elite, privately educated and those aged over 50. This rather archaic view is grossly erroneous; it’s also incredibly damaging, as it is putting an invisible barrier between the benefits of financial planning and those who would actually gain the most from it. The truth is, financial planning is for everyone and the sooner you embrace it, the more you can benefit.
"Financial planning is a service that anyone can use. Generally, the earlier in life you start planning your finances, the more financial securty you will achieve for your future."
To use a rather apt simile, financial planning is like compound interest: the sooner you start, the more you will get back. More than that, the earlier in life you start to save, the less you have to regularly put away in order to achieve your desired goal. The same analogy can be applied to financial planning in general.
When I was a kid I was fortunate enough to attend Oakham School. I owe a lot to the education I received in my formative years, and I’m thankful for the inspirational style of teaching, abundant opportunities and friendships that were forged. However, I can’t help thinking that my education lacked a key component: how to manage my money.
I believe that a common problem with the British education system is the lack of teaching around money management. Young adults are suddenly thrust into the ‘real’ world between the ages of 16-21, but don’t know how to sensibly use a credit card, obtain a mortgage, and, almost more importantly, save for their future. Kids are encouraged to think about what they’d like to achieve in life, but are never taught how to achieve those goals through their finances. And sadly, most adults are in the same boat.
I can almost hear some of shouting ‘that’s great, but what if I haven’t got any money in the first place?’ I’d counter this by saying ‘If you don’t have a goal, aim or ambition have can you ever achieve it?’
If schools taught students about the benefits of saving for the future, the power of things like compound growth, and the importance of financially protecting yourself against risks such as illness, maybe more of us would feel confident that we would have enough? Educating our younger generations about this topic is crucial, but so is educating yourself- whatever your stage of life.
It’s never too late to start. Initial lack of wealth is absolutely not a reason to fall short of your goals; but lack of planning is. Once you understand how to harness financial planning, you can begin to reap the rewards.
To help with this very topic, in 2017 we wrote ‘SMART Money’: How to Be Financially Free’. Designed to develop a ‘savings psychology’, so that you can fill your life with what you love and how to build, manage and protect your wealth, it teaches how powers such as compound growth work and how you can maximise these tools.
Financial planning offers a whole host of advantages, most importantly giving you the ability to live more comfortably and confidently, which, I’m sure you will agree, are values we all strive towards.