When you think about what you want the future to look like, it’s probably not the value of your assets that comes to mind first. Instead, you might think about the experiences you want or the wellbeing of your loved ones 

Yet, to build the life you want, money is usually an important factor. While you often hear that “money can’t buy happiness”, the reality is that your financial circumstances are likely to play a role in whether you can secure the lifestyle you want. 

By making your financial plan as much about happiness as your wealth, you could work towards your long-term goals and improve your overall wellbeing. 

Combining your financial goals and happiness could improve your wellbeing

There are several excellent reasons to consider both your wealth and happiness when creating a financial plan. 

First, financial stress can be detrimental to your wellbeing. 

According to findings from the National Debtline, almost half of people in the UK were worried about money at the start of 2024 – the equivalent of 24.9 million people. Only 12% of people said they were not at all worried and felt able to cope financially. 

Indeed, a report from Aegon found even among top earners, 1 in 3 people worried about their finances. So, taking control of your finances could improve your overall mental wellbeing. 

In addition, it could focus on how you use your wealth to deliver outcomes that boost your happiness over the long term. 

Rather than focusing simply on wealth creation, a financial plan would consider what steps you need to take to be able to reach your goals.

For example, after reviewing your finances, you might decide to reduce your working hours to phase into retirement sooner than expected. While that could mean the value of your pension is lower than if you continued to work, the free time you’d gain could be far more valuable. You might use the freedom to spend more time with your grandchildren or indulge in a hobby that brings you joy.

Making happiness a key part of your financial plan may allow you to make decisions that balance getting more out of your life with financial security.

3 valuable ways making happiness part of your financial plan could improve it

1. It gives you a chance to define what makes you happy

While you might work hard to build a fulfilling life, when was the last time you really considered what makes you happy?

According to the Financial Wellbeing Index from Aegon, just 1 in 4 people are very aware of the day-to-day experiences that give them joy and purpose in life. Similarly, only 1 in 4 people have a concrete vision of the things and experiences their future self might want. 

This disconnect could mean some people are making decisions that don’t align with the future they picture for themselves.

By basing your financial plan on happiness, it provides an opportunity to set out what could improve your wellbeing now and in the future.   

2. It could enhance your motivation to follow a long-term plan

Sticking to a financial plan over a long period can be difficult. However, knowing that your efforts will help you create the life you want may improve your motivation and help you stay on track.

If you daydream about retiring early, having a financial plan that’s been tailored to this goal might mean you’re less likely to pause pension contributions to fund short-term expenses.

So, putting your happiness at the centre of your financial plan could improve the outcomes. 

3. It may help you calculate how much is “enough”

While money can’t buy happiness, it certainly can play a role in creating a life that will make you happy. Effective financial planning could help you calculate how much is “enough” for you.

Whether your goal is to retire early, have the financial freedom to travel more, or spend time with your family, financial security is often important for peace of mind. A financial plan could help you get your finances in order, so you can focus on what’s more important – enjoying your life. 

Contact us to devise a financial plan that focuses on your happiness 

If you’d like to work with us to devise a financial plan that places your happiness and wellbeing at the centre, please contact us. We’ll work with you to understand your goals and circumstances to build a tailored plan that suits your needs.

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.  

Imagine you could time travel to understand how your financial decisions today might affect your lifestyle in 10 or 20 years. You may be in a better position to turn your goals into a reality. Read on to find out how working with a financial planner could give you a glimpse into the future.

Time travel films and books offer plenty of warnings about the perils of changing the timeline – even a seemingly small change can have a huge impact. With this in mind, a “time travelling” financial plan could help you make better decisions as you could see the effect they might have on your long-term security and happiness. 

The good news is that you don’t need a DeLorean or the help of an eccentric scientist to look at your financial future. 

Cashflow modelling could let you see the impact of the decisions you’re making

Cashflow modelling might not sound as exciting as hopping into a time machine, but it can be an invaluable tool when you’re creating a long-term financial plan.

To start, you’ll need to input data into a cashflow model. This might include the value of your assets, like savings, investments, or property, your regular income, and your outgoings. You’ll also want to add the financial decisions you’ve already made. For instance, how much you’re contributing to your pension each month. 

With the basic information added, you can make certain assumptions to predict how your assets might change over time. So, you might include your investment portfolio’s expected annual rate of return to understand how the value could change or consider how inflation may affect your expenses. 

The results can then help you visualise your assets and financial security in the future. With this information, you can start to understand whether you’re on track to secure the future you want.  

In some cases, you might identify a potential gap, which could lead to you adjusting your plans or making changes to your finances now so you can reach your goals. Again, you can use cashflow modelling to assess changes. 

Adjusting your cashflow model may help you understand alternative outcomes 

One of the most useful benefits of cashflow modelling is that it doesn’t just allow you to see the outcome of the actions you’re already taking. You can also model other scenarios.

So, you could see how adjusting your decisions now might improve your ability to reach your goals or even make aspirations you previously thought were out of reach achievable. 

For example, you could model how:

• Retiring early may affect how much you can withdraw from your pension sustainably 
• Increasing your pension contributions might afford you a more comfortable retirement 
• Using your savings to travel the world now may impact your long-term financial security
• Boosting your regular investment contributions could grow your wealth over a long-term time frame
• Gifting inheritances to your children and grandchildren now will affect the value of your estate in the future.

As a result, using a cashflow model to understand the long-term implications of alternative options could help you find the right approach for you. It may give you the confidence to adjust your actions and stick to a long-term financial plan as you’ll understand the possible outcomes. 

It’s not just your behaviours you can model either, but unexpected events or changes outside of your control. Understanding the effect of a market downturn or period of illness where you are unable to work might enable you to create a safety net that offers you peace of mind. 

Of course, the results of a cashflow model cannot be guaranteed and factors outside of your control, such as investment volatility, might also affect the outcome. Even so, it can be a valuable way to identify potential shortfalls or opportunities.

Contact us to time travel and discover how you could reach your goals 

If you’d like to take a look at your financial future and understand what it could mean for your lifestyle, please get in touch. We can help you assess how the decisions you make could affect your goals. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate cashflow planning.

Often one of the biggest benefits of a bespoke financial plan is that it allows you to devise a blueprint to follow, with your goals placed at the centre. It’s a strategy that could help you focus on what you want to achieve in life and make working with a professional even more valuable to you.

Over the last few months, you’ve read about how a financial plan could help you grow your wealth and the value of non-tangible benefits, like feeling more confident about your finances. Now, read on to discover how financial planning might help you align your decisions with your aspirations. 

Your goals are the focus of your financial plan 

While you might think of financial planning as being about figures and growing your wealth, it goes far beyond this. Financial planning aims to help you reach your goals, whether you want to retire early, have the money to book holidays to exciting destinations or be in a position to offer support to your family. 

To achieve this aim, financial planning starts by understanding what your goals are. Having a clear idea about what your aspirations are could allow you to make decisions that enable you to turn them into a reality. So, defining what success means for you is often crucial. 

For example, you might start by saying your family is a priority and you want to offer them support. But what does this look like? Do you want to offer financial support, such as a deposit when they’re buying a home, or do you want to have greater freedom so you can look after your grandchildren?

As financial planners, we can help you define your life goals and understand what’s possible. 

Cashflow modelling could help you visualise the impact of your decisions 

One of the challenges of setting out how to reach your long-term goals is that it can be difficult to know whether the decisions you’re making will support or harm them.

Cashflow modelling can be used as an invaluable tool to help you visualise the impact decisions might have on your financial future and, so, on your goals. 

When using cashflow modelling you input data like the value of your assets now. You can then model how different decisions will affect the outcome. It’s a way of understanding how the decisions you make now could affect goals that are years away. 

If your goal is to retire early, you might update the information used for cashflow modelling to answer questions like:

• Could I afford to retire five years earlier?
• If I retire when I’m 55, what income could my pension sustainably provide?
• Could I take a tax-free lump sum from my pension when I first retire and still be financially secure? 
• How would increasing or decreasing my pension contributions affect the value of my pension pot at retirement?

Armed with the information cashflow modelling provides, you’re often in a better position to make financial decisions that reflect your aspirations. 

A financial plan may keep your goals on track as your circumstances change 

You might set out clear goals now, but as your circumstances and desires change, they may not be the same in five years.

A family illness might mean you decide to step away from work sooner than you expected to support them. Or an unexpected inheritance may mean you’re able to secure goals you previously thought were out of reach. 

By having an ongoing relationship with a financial planner and regular reviews, which will include reassessing your aspirations, we can help you adjust your plan, so it continues to suit your needs. 

It’s not just your goals that could lead to change either.

You might come across an investment opportunity and decide you want to divert some of the money to this. A financial plan could help you assess if it’s the right decision for you and how it might affect other parts of your plan.

For instance, could choosing a higher-risk investment rather than contributing to your pension place your comfortable retirement at risk? Or are you in a position where you can invest and still feel confident about your retirement?

By modelling opportunities or obstacles using cashflow modelling, working with a financial planner could help you understand the impact of making changes to your plans as opportunities arise.

Contact us to talk about how a financial plan could be valuable for you

As you’ve read over the last few months, a tailored financial plan could provide financial and non-financial benefits. If you’d like to explore how a financial plan could add value to your life, please contact us. 

In an initial meeting, we can discuss how we could work together to help you reach your goals. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.  

The Financial Conduct Authority does not regulate cashflow modelling.