I chatted to quite a few people about their priorities and challenges. As part of our day I ran a series of Financial MOT workshops to help the delegates get to grip with their finances. Being able to model good financial behaviour is essential for the next generation.
The aspect of Financial Planning that we spoke most about was budgeting. People generally have a rough idea of how this works, but for many it’s a pretty boring thing to do.
Thankfully there are lots of apps which help with work out where your money is currently going.
One way of categorising spending is to consider basic/discretionary/luxury.
We thought about the wellbeing (or happiness) that we got from each item. If we think about our spending with this additional overlay we can see whether there are things that don’t fit with our priorities. In turn these can be turned into savings sources and, in turn, future wellbeing.
Financial Planners and Paraplanners have a great opportunity to help people line up their financial life with their personal priorities.
Some things are clearly essential regardless of how you feel about them, but where we can we should try to keep these things in sync.
Money is the fuel for the journey and our job is to help people use their money to have the best journey possible. We can’t ignore personal values and our wellbeing.
For many financial plans it’s necessary to invest. At EQ Investors we think that portfolios should match up to personal values.
It is possible to design portfolios that do this and measure progress. Embracing portfolios that have a positive impact and produce a decent return is surely a desirable outcome for many and good for society.