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Time for a financial plan?

Financial planning isn’t just for the wealthy, it’s for everyone and the best time to start it is right now.

The subject of financial planning raises its head at this time every year, but if you kick the year off with a solid plan, you could be amazed just how much further your money goes and how quickly you can get your financial goals on track.

Here are five practical steps to help bring your plans to fruition.

Step 1: Build a clear picture 

Building a financial plan - calculate net worth

Roll up your sleeves, print your bank statements and get real about the money flowing in and out of your accounts. This should include what you’re earning, spending, saving, investing and contributing to a pension. Look at assets like property too and don’t forget and the villain of the piece, debt.

The aim is to build a picture of what you’re worth and consider the changes you can make today, to plan for tomorrow.

You can even calculate your net worth using this simple sum:


Everything you own         (e.g. equity in your home, savings or pension pot)
Everything you owe        (e.g. any debt or outstanding mortgage)
Your financial worth


It might take a little time and effort to pull everything together, but’s a crucial first step and you’ll feel better once everything is more organised and all your important documents are in one place.

Step 2: Decide where you want to be

Building a financial plan - explore the options

Setting financial goals requires honesty, because you need to think about what’s most important to you and be realistic about how your future plans will be supported financially.

It’s quite likely you won’t be able to finance everything you’d like to, which means prioritising your ambitions and in some cases, making a few tough calls.

Primary goals might include, being mortgage-free by 50; funding your children’s college education, buying a bigger house, retiring early or starting your own business.

The very exercise of ranking your goals will help you focus and decide what matters most. It will also create momentum and take you one step closer to making them real.

Step 3: Cost your goals      

Do your research and give your goals an accurate price tag. If college fees rank highly find out how much annual fees, accommodation and living costs are at some of the colleges your children have talked about and assume the costs will increase gradually over time.

If buying your ‘forever home’ is your top priority, find out how much it would cost to buy it or build it now. That way, you’ll know what the deposit, build costs, timescales and monthly mortgage repayments look like and you can make a call on whether it’s feasible or needs to be shelved for now.

If retirement is front of mind for you, think about how you want to spend it, and work out what it would cost to make it happen.

It’s only when you know how much you need, that you can work out the best way to get there. There are lots of great savings calculators out there and the Irish Life pension calculator could prove helpful.

Step 4: Plan to get there faster

You will get it eventually

Brainstorming ways to make and save money isn’t just good fun, it could actually prove incredibly fruitful.

Asking for a pay increase, taking on a second job or selling things you no longer use start to free up money to save and invest, or finance a new venture that would allow you to do both more successfully.

Look for obvious wins like the interest rate on your savings account and fees and charges that could be eating up any interest you’re making.

Remember, the higher the rate and lower the costs, the quicker your savings will grow, so don’t settle for an account that ends up costing you money after inflation has been factored in.

Step 5: Consider the alternatives and talk to an expert

Financial plan - expert advice

If you want to think beyond low interest deposit accounts, investing might be an option for better growth. Remember, investing doesn’t have to be high- risk, there are funds designed to satisfy every appetite and multi asset funds can give any investor affordable access to a diverse portfolio.

Check out: Saving and investment tips for any age

A financial advisor can help you create a plan that looks after your short-term needs and long-term goals, with practical steps and realistic milestones.


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