6 Easy Steps to Plan for Your Future

6 Easy Steps to Plan for Your Future

We all have an idea of what we want for our future and retirement. However, for many Australians their dreams for the future are getting further and further away from them. This could be due to investment choices, occupation and employment changes or perhaps not understanding how to make the most of their superannuation and cash flow.

The reality is if you want to ensure your plans and dreams for retirement become a reality, having a defined plan and process in place is essential.

The financial planning process is one of discovery and becomes a true journey from where you are now to where you want to be. It not only gives you insight into your financial affairs, but one thing we have found is that it tends to give meaning to what you are doing with your time and your life.

It was Lao Tzu who said “the journey of a thousand miles begins with a single step” and for people looking to get control of their finances and ensure they reach their lifestyle and future goals, the first step is understanding exactly where you are now.

These are the six steps you should go through when setting your financial plan – either by yourself or with the help of a professional(s).

1. Discovery       

You can’t know where you’re headed unless you know where you’re starting from so this is all about getting acquainted with your current situation – thoroughly. Some of the questions you should cover are:

  • What is my income before and after tax?
  • What are my regular expenses?
  • What is my current cash flow?
  • What is my take-home pay?
  • What is my net income (surplus after expenses)?
  • What are my assets and liabilities?


2. Set the target – goal setting

If you don’t set goals and objectives, you have nothing to aim for and no reason to change.  You’ll just keep plodding along, treading water and retiring before you know it with less than you need. One strategy to set goals is it set SMART goals. The word SMART is an acronym for specific, measurable, achievable, realistic and timely.

As always with goal-setting, it is important to question why you want to achieve a particular goal. Make sure you’re doing it for the right reasons.

You might like to refer to our previous blog post on goal-setting – it will help you get down on paper 3 to 5 goals you can focus on right now.

3. Measure the gap

In this step you want to look at the gap between where you are now and where you want to be, and then work out how you can implement strategies and tactics to bridge that gap to achieve your goals over your specified timeframe.

4. Strategies and execution

You have now defined your goals and have questioned why they’re important to you. Now we have to work out how you will achieve those goals.

Strategies are the plans that will allow you to accomplish your goals. We need to establish a set of strategies for achieving different goals and satisfying different parts of your financial plan. For example, one strategy may be to ensure you have a will in place and up to date. The strategy then feeds into a deeper action-item list of who you might need to contact to ensure your will is set up properly and/or up to date. Make sure you note down all action items and then you can get to work executing the strategies that will help you achieve your goals.

5. The financial plan

This step brings all of the information gathered together in a written plan for your future. It will outline why we’re doing what we’re doing, how we’re going to do it and what the plan actually is. It will outline your goals and objectives and will have all of this information clear and in the one place to ensure you’re well on your way to taking control of your finances and your retirement.

As a result of financial legislation, planners are required to provide you with a complex version of this plan but I always advise people to ensure they ask their planner for a simple 2 or 3 page summary of the financial plan, in plain English, that you can always have handy to refer to and stay on track.

6. Ongoing review and management

I can’t believe I’m quoting boxer Mike Tyson here but it was he who said “everyone has a plan until they get punched in the mouth”. Not exactly eloquent but it is true – life will throw you some curve balls and changes. As such, your financial plan is going to change, which is why it’s important to set aside time with your adviser or yourself every 6-12 months to review your goals and objectives and how your plan is tracking. Regular maintenance also ensures that any issues that arise are managed quickly and efficiently.

If you want to get your life on track, have some financial goals you want to achieve or are ready to start planning for your retirement, we can help you. Contact us and our planner Chris Kelly can help you reach your goals.

Please note this information is general advice only. Please seek advice before acting on any information in this article.
Sacha Loutkovsky
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