Your Life Plan Is Your Path

17 May 2020

None of us planned for this.

 

But your Life-Centered Plan does have mechanisms in place that will help you get through this tough patch with the coronavirus and the financial market volatility. The key is not letting heightened emotions and bad headlines steer you towards decisions that could have a negative impact on your finances long after this crisis has passed. 

 

Easier said than done, right? 

 

These three steps will help you remember why you have a plan in the first place, what it’s designed to help you accomplish, and how we can help. 

1. Acknowledge Your Emotions

Worry. Anger. Uncertainty. Nervousness. Maybe even a disbelieving chuckle or two at the craziness of it all. 
 
Whatever you’re feeling right now is OK. We understand that your financial concerns are just one part of a very complicated and very personal situation involving your family, your work, your health care, and your basic needs. Add in the anxiety we’re all feeling about the situation in the wider world and you wouldn’t be human if your emotions weren’t a bit jumbled right now. 
 
So please understand that when we advise you to take emotions out of your financial decision making during a crisis, we’re not advising you to ignore what you’re feeling. On the contrary, we encourage you to talk through your feelings with your spouse, children, co-workers, and other close friends or family. Burying your emotions only makes stressful situations more stressful. Our human capacity for empathy, understanding, connection, and mutual concern is going to help us all weather this storm. It’s also going to lead you towards healthier and more productive outlets for your feelings, such as charitable giving and finding creative ways to support local businesses. 

2. Tell Yourself Your Story

Once your feelings are out in the open, it will be easier for you to think about the financial part of your situation with a clear head.

 

Try, for a moment, to set aside the market swings that may have been dominating your news feeds for the past few weeks. Instead, think about the reason that you started working with us in the first place. 

 

In those first few meetings, we didn’t talk about how to time your investments to world news or market fluctuations. Instead, we talked about you. About the life you desire for you and your loved ones.

 

And finally, we discussed how our Life-Centered Planning process can help you get that best possible life with the money you have. 

3. Prioritize Now, Adjust for Soon, Stay on Track For Later

Because we plan for clients’ lives, not just their money, we always take in a wide view of financial progress. Today’s big market dip will look like a blip with a thirty or forty-year panoramic perspective. But “stick to your plan” doesn’t mean we don’t do anything during a major market correction, especially if you’re at or nearing retirement age. It means that the moves we contemplate are based more on your upcoming Lifeline Cash Flow transitions than they are on unpredictable market movements.

 

To keep yourself focused on things you can plan for, grab a sheet of paper and sit down with your spouse. Divide that sheet into three sections: 

 

-Now: Financial concerns that need to be addressed as soon as possible, such as paying next month’s bills, a necessary home repair, or a health care issue. 

-Soon: Important items 6-12 months out that you still have time to prepare for. 

-Later: Everything else.

 

Most of these items will already be things we’ve discussed and planned for over the course of our work together. But it’s possible that recent events have filled up your Nows and bumped some Soons into Laters. We deliberately designed your Life-Centered Plan so that it can be responsive to these changing priorities and transitions while still being sensitive to larger economic realities.

 

To remind yourself of what you’re truly planning for, it might be a good idea to revisit your most recent Lifeline Cash Flow Forecast. We’d be happy to email you a copy you can review. Or call us up and we can work through this exercise together and see what adjustments we should think about. The current crisis might alter your path a little bit. But your destination may still be the same. 

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Spring-Cleaning Financial Clutter

4 May 2021
Is a financial check-up on your Spring-Cleaning list? Once you've tidied your lawn and emptied that out-of-control closet, let some fresh air into your home office and use these six tips to freshen up how you spend, save, and plan for the future. In our experience ensuring that clients remain confident in their financial situation now and going forward is important and setting aside some time, maybe a morning, is well worth it for peace of mind. By drawing a financial line in the sand, we can model the impact of your “what if scenarios” on current and future finances. We would advise doing this once a year in “normal” times anyway, but the events of the last year have almost certainly impacted upon your finances and may indeed have completely changed the way that you think about your future. 1. Pay yourself first. Making automatic contributions into your insurance, savings, investment, and pensions is a small budget adjustment that can go a long way towards building wealth over time. Is there extra money in your monthly cash flow that you could use to increase those investments? Do you want to save/invest more now - or enjoy a treat, break, holiday? How much extra could you contribute per year if you went from five coffee shop visits per week down to two, or started packing your lunch every day? Your life - your choice. 2. Review your monthly statements. Automating your investments and bill payments doesn't mean that you never have to check on them. Get back in the habit of reviewing your monthly bank and credit card statements. Make a list of all your recurring charges and subscriptions and consider cancelling anything you're not using enough to justify the expense. Also review the terms and conditions of your accounts and be sure you understand what fees, if any, your financial institutions might be charging you and what benefits you might be overlooking 3. Shop around. And if you don't like those fees? Of if the cost of your Satellite/Internet/Streaming TV bundles have shot up unexpectedly? Or if you never get near the data cap on your mobile phone/tablet service? There might be better deals elsewhere. Do a little comparison shopping, and don't be afraid to play some hardball if you can find ways to save a few pounds every month. 4. Check your credit report and score. You can also use a free credit score service to see where you stand with potential lenders and check for any major fluctuations in your score, which could be another indicator of fraud. Together, these reports will help limit any surprises if you're preparing for a big purchase in the coming year, such as a car or new home. Many such services also offer key services and options for loans, credit card rates etc 5. Scan and shred. Digitising your financial records can save space and simplify tax season. There are many apps and online services that can help you replace your filing cabinet with a cloud-backed folder, but snapping pictures of important documents with your cell phone is an easy way to get started. Once you've backed up your statements and receipts you can shred anything that's over three years old. Also review your hard copy filing system and make sure that your birth and marriage certificates, National Insurance cards, insurance policies, and Will are stored safely. 6. Talk to your financial planner. How have your short-term and long-term financial goals changed in the last year? Are you thinking about making a career change? Are your teenagers scouting colleges and universities? Is there a new baby on the way? Do you want to start making a bigger impact in your community through sustained giving? Is this the year you’re finally going to start your own company? Do you or your spouse have any new health care concerns? We use your answers to these kinds of questions to guide our Life-Centered Planning process. Annually, it’s a good idea to check if dust is settling on some out-of-date plans or if the path to any of your financial goals is feeling a little cluttered. Give us a call and we’ll schedule a meeting to shake off some cobwebs and put a fresh shine on the year ahead.
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