Golden Rules of Financial Planning

Financial planning is not just about saving and investing. It allows people to create both short and long term life goals, by taking a step back to look at the bigger picture. When a financial plan is in place, setting and meeting financial goals is simplified. But what are the golden rules of financial planning you should consider?

1. Have a plan

With financial planning, the earlier you start, the more you save. Having a plan in place can cut costs, create gains, and avoid money issues down the line. Step one involves calculating your net worth. Step 2 is identifying goals, followed by understanding financial obligations, risk assessments, and finally, investing.

2. Protect your family and finances

Planning for risks means that you can secure your family and finances. People often don’t consider this and focus on building their investment portfolio. Insurance is crucial to secure your family’s future. The level of cover needed will depend on your life stage and personal requirements. This can be tailored to meet your needs at every stage.

Shutter Stock Family Image

3. Don’t ignore taxes

As Benjamin Franklin said, nothing is certain except death and taxes. Taxes affect all aspects of your finances. It is important that you don’t lose out by missing payments. Planning for tax obligations is important. Not only are there penalties for late payments, but by ignoring your taxes you could miss out on deductions and capital gains.

4. Monitor your investments

Building your financial plan and investment portfolio requires frequently monitoring. This review will show you if you’re on track to reaching your financial goals, and what you should change. We recommend that you are monitoring your progress on a quarterly basis for short-term goals, and annually for longer ones. This is especially important when market conditions are changing.

Money Saving

5. Stay aware of market changes

A good financial plan doesn’t only mean you invest in the right assets and monitor your progress. It also means that you increase your financial knowledge to be aware of changes that might affect your investments in the future. You should always have a basic understanding of what you are investing in so that you are better equipped to handle market changes.

The ATB Chartered Accountants difference

ATB Chartered Accountants are proactive, forward-looking business accountants. But the ATB difference is that we are fully qualified financial planners, in addition to holding accounting degrees and CPA qualifications. Traditional financial planners only hold a financial planning certificate and are not therefore qualified to advise on tax. Tax planning is essential in financial planning, and we are able to identify opportunities that sit behind our tax advice because we understand the implications.

Using your accountant as your financial planner ensures that all aspects of your wealth management are monitored and maximised. It makes sense to use a trusted financial adviser who already has a deep understanding of your tax and business finances, and a proven track record of wealth management. A holistic view can make the most of every opportunity. We can advise on self managed super funds (SMSFs), mortgages, life insurance, income protection and trauma insurances, and we work with expert partners in all areas to offer strategic advice at the highest level.

If you’re ready to save on time, save on fees, and think more strategically about your future, talk to us about financial planning, we’re happy to help.