Finance Matters

Your fortnightly column on topical financial matters

What is Financial Planning and how can it benefit you?

Welcome to the first edition of the new financial column “Finance Matters”. The column is intended to cover every day topical financial matters in an educational and informative manner. In future editions I will cover a broad range of practical financial issues, many of which will be relevant to most readers at some point in their lives.

This week I will look at the benefits of professional financial planning and how it can have an extremely positive effect on you, your family and your business. It can help you plan for the future you want. As with any journey, particularly when it comes to your finances, planning ahead and prioritizing your goals is imperative.

What is Financial Planning?

Financial planning is the process of meeting your life, personal and financial goals through the proper management of your finances. A detailed, comprehensive financial plan is an important step in ensuring you reach your lifestyle and financial milestones. Once in place, it is an invaluable tool to help you document your objectives over the short, medium and long term. It’s about being organised, planning ahead and being in control of your finances.

Lifestyle and financial milestones might include:

  • Paying off the mortgage early
  • Retiring at a certain age
  • Creating a savings fund for your children’s university costs
  • Protecting your business interests
  • Moving home or even purchasing a second home

For many, finance can be an overwhelming subject, it can be a very difficult topic to fully appreciate. It is therefore understanding why so many of us put the task of organising our financial affairs to the back of our minds and far down the list of our current priorities. It can seem like a laborious task with many potential pitfalls and hazards. However, help is to hand. Once you commit to spending the time and effort needed on formulating a well-developed financial plan, it can be an extremely rewarding procedure and the outcomes for your future are endless.

Is Financial Planning for everyone?

Many people that I meet tell me that they thought financial planning was only for the wealthy. After all, if someone does not have surplus money at the end of each month, what is there to plan for? However, sooner or later you may want to buy or build your own home, get married, send your children to university or college, set-up your own business or retire securely. I ask prospective customers ‘’how will you find the resources for any of these life goals, if you do not plan in advance for them?’’.

Aligning your personal goals with your finances allows you to be financially independent and address unexpected events in your life. As we all know, the future is uncertain, but in today’s fast moving world, financial security is becoming increasingly important. So having your own financial life under control can be an enormous positive for you, your family and your business.

The formulation of your own personalised financial plan, along with prudent budgeting and decision-making along the way, will ultimately enable you to reach your goals and attain financial freedom at some stage down the road.

What are some of the benefits of having a Financial Plan?

  • Peace of mind and security for you, your family and your business
  • Potential tax savings (retirement planning, annual gift exemptions and relief’s)
  • Protect your business and shareholders
  • Helps your monitor and evaluate your progress
  • Helps you to keep a realistic view on attaining your objectives
  • Puts you in charge and in control

Who can assist you in organising your Financial affairs?

If you would like to begin the journey to design and construct your personal and financial future, you should meet with a suitably qualified Certified Financial Planner (CFP®). A professional Certified Financial Planner® is a trusted advisor who works with you to review all of your options, so that you can make informed, educated decisions about your financial situation at every stage in life. By meeting demanding international competency, ethical and professional practice standards, a financial planner is qualified to design your fully integrated financial plan that will ultimately allow you to take control of your finances and achieve your life goals.

They will work closely with you in defining your future objectives and aspirations. In the first instance, they will take the time to learn about you, where you are now and where you want to be. They will then draft a comprehensive personal financial plan to show you how to realise your overall financial goals. Working closely with your financial planner can be a very supportive step in securing your financial future.

So, prior to deciding to make your next investment decision, top-up your pension, gift funds to your children or sell an investment property, make sure to meet with your local Certified Financial Planner®. They will help you understand how your next financial decision could impact your current and future lifestyle.

Gerard O’Brien LL.B LL.M CFP®QFA is the Owner of Heritage Wealth, a Financial Planning practice based in Main Street, Midleton, Cork. For more information, contact Gerard on 083 466 2040.