Financial planning – How to get started

The hardest part of financial planning is knowing how to get started!

“How much should I put into my pension?”

“How do I use an ISA effectively?”

“How do I invest?”

These are just a few of the questions people ask themselves as they consider approaching financial planning for the first time. As a result, the majority of people simply end up feeling overwhelmed and fail to take that first important step to get them going on a path to financial freedom.

Trying to answer every question at once, will generally result in you shoving all of your paperwork back into a drawer and deciding to return to it ‘next year’. Unfortunately, ‘next year’ becomes the year after next, followed by the year after that and, before you know it, retirement will be at your door step.

One simple first step to get your financial planning started

Luckily, to help overcome this financial mountain, you only need to focus on one golden first step. To get started you simply need to create a budget – do this and the rest will begin falling into place.

Yes, budgeting may sound a bit dull but, in reality, it’s quite the opposite. Contrary to popular belief, budgets aren’t actually about limiting our spending. A budget is a tool that allows you to pay for all of the things you enjoy in life and acquire investments that will provide for your future plans.

How most people save

32% of adults in the UK have no savings at all. Research focusing on behavioural economics and our day-to-day spending habits sheds some light as to why:  In the UK, the most commonly adopted approach to saving is to spend our earned income first and then save what’s leftover at the end of the month. This habit naturally causes us to spend more, since the money is there to be spent.

What’s next?

I guarantee that simply by making this small, habitual change, you will begin saving and investing far more, whilst feeling little impact on your current spending. Stop getting bogged down and pause before putting that paperwork in the drawer. Instead, take a deep breath and begin your financial planning with this first, simple step.

Create your budget and start planning for your future today…