David Lunn shares his five-point plan
A Kilkenny Financial Planner says that locating financial documents, honest budgeting, reducing debt, prioritising spending and planning for future expenses should make up your five-step financial review ahead of the new year.
David Lunn, Director of Foundation Stone Financial Planning says the new year is a crucial time for financial planning as many of us reflect on our lives and plan for the year ahead.
“Maybe it’s the downtime we have to reflect on the direction of our lives - perhaps it’s because we also spend time with our loved ones and decide to make plans for their security,” he said.
“Whatever your reason, it’s vital to have a financial plan heading into 2022.”
1 - Get organised
He says that, firstly, you should get organised and locate your important financial documents.
“If something was to happen to you, would your loved ones be able to find these important documents? List the providers and policy or account numbers, put them in an envelope and seal it and then leave it in a safe place for loved ones.”
He adds that it’s also good to consider at this point what policies and expenses to keep, dump and review.
2 -Be Honest
Secondly, David says we need to be honest with our expenses and income.
“Download your last three bank statements. Add up all your expenses and subtract the amount from all your income. Be realistic – are you spending beyond your means?”
3 - Prioritise spending
After that, prioritise your spending by sorting your expenses into three groups.
“These include needs such as utilities, food and mortgage or rent; wants such as dining out, cinema trips and hobbies; and desires such as holidays and luxury items.
Can you shop around for better value for needs? Can you reassess what is a need and a want or desire?”
4 - Reduce your debt
People keen to manage their finances should start the year with a plan to get rid of or reduce their debt.
“Credit card debt and overdrafts can become unmanageable if not sorted but tackle them one task at a time,” said David.
5 - Plan Ahead
Finally, plan for any large expenditures during the year ahead such as holidays, weddings or home renovations.
“Work out their cost and try to set aside money to pay for these things so that you do not need to borrow,” he added. If you can plan up to five years in advance, even better.”
Break down goals
Like anything in life, bigger goals are more achievable when you break them down into easy-to-take actions.
“Don’t procrastinate any longer – plan for a better financial year and form some new money habits,” David advised.
Check out more money tips and advice on foundationstonefp.ie.
Did you know that there are between 30 and 60 transitions in the average life – from the birth of a child to buying a home, retiring or receiving an inheritance?
When life is in transition, money is in motion. It’s through these experiences and life transitions that the financial planner can add incredible value.
Foundation Stone Financial Planning works with business owners, families, capital recipients, investors and those planning their retirement.
Foundation Stone Financial Planning Ltd is based in Kilkenny but works with clients across Ireland offering financial planning and objective financial advice.
The company is run by directors and certified financial planners David Lunn MSc CFP and Dervla Moloney MSc CFP, both former Bank of Ireland financial planners with a collective 60 years of experience in the financial advice industry.
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