Financial Planning 101: knowing where you are now

There’s no silver bullet when it comes to managing your financial situation and the best place to start is at Step 1 in the structured plan our clients use to achieve their financial goals:

1.  Awareness – knowing where you are financially
2.  Goals – knowing where you want to go
3.  Strategy – determining how you can get there
4.  Support – finding out who can help you
5.  Review – staying on course

Read on to find out what we say in our first book about the importance of Step 1: Awareness.

* When we first meet new prospective clients, the three most common issues raised are:

  1. ‘We don’t know where all our money is going. When we reflect at year’s end, we never seem to be any better off than we were at the start of the year and we’re worried we won’t have enough money to retire.’
  2. ‘We don’t seem to know where we are financially or where we are going in the future, and need some direction.’
  3. We have no plan on how to move forward financially.’

We’ll address direction and creating a plan in the first few chapters of our book. For the moment, we want to focus on where you are now. After all, any plan starts with looking at your current situation with a critical eye to determine exactly how far you need to go to achieve what you want.

Here are six powerful reasons why it is important for you to get clarity around your financial position sooner rather than later:

  1. Improved financial understanding – Clarity on your financial position will increase your financial understanding, as you will be able to set effective financial goals, see the effects of your decisions, and review your results over time.
  2. Better decision making ability – Without this clarity, it can be difficult to make the best decisions for your financial situation, your plans for your family and your level of risk tolerance. Understanding your financial position gives you the ability to accept or cancel the liabilities inherent in many assets, and build assets that don’t become a burden in the future.
  3. Effective income management – Having clarity on how your income is generated and where it is going allows you to manage it more effectively. This helps you understand how much money you’ll need for mortgage payments, tax, living and other monthly expenditures and savings, meaning you don’t need to worry about being caught out.
  4. Improved cash flow – Understanding your income can then be used to improve your cash flow by adjusting your spending patterns and expenses through tax planning, prudent spending and careful budgeting. This will help you keep more of your hard-earned cash.
  5. Increased capital – An increase in cash flow will lead to an increase in cash reserves or capital, allowing you to consider investments to improve your overall financial wellbeing. This capital or the investments you choose can then be utilised in times of emergency or for educational purposes.
  6. Better standard of living – This in turn helps provide your family with financial security and the freedom to improve their lifestyle.

So where are you now? Let’s start with the financial issues that are keeping you up at night.

This is the best test for identifying your major financial concerns.

If you’re anything like most new clients, these might include:

  • How can I make sure that I meet my day-to-day living expenses?
  • How would my family cope if I were to be retrenched or have a serious illness or, worse still, die?
  • Do I have enough to retire?
  • What does retirement cost?
  • How long will I live in retirement?
  • Where do I go and who can I trust to help me?


* This post includes extracts from our book, They said the World was my Oyster but someone Stole the Pearl, A Baby Boomer’s guide to Living a Life of Choice not compromise by Markham Collins & Russell Mann, available June 2016.

Whether or not you are a Baby Boomer, if you would like help to take Step 1 and clarify your current financial situation, please contact Collins Mann Private Wealth on 07 3251 3201.

Financial Services

Our services include:

  • Values-based financial planning.
  • Wealth accumulation strategies.
  • Tax-effective strategies.
  • Risk management.
  • Retirement planning.
  • Estate planning.
  • Divorce financial settlement analysis.


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