I KNOW THAT financial planning is something which many people are actively afraid of yet I have always been convinced of its transformative power. I have witnessed, first-hand, many times over, the positive benefits of a person taking control of their financial situation. Many of my clients have described to me how unburdened they become once they get to grips with their finances and start to feel financially stable both in the present and for the future.

Now the benefits of financial planning have been scientifically proven! A recent study published in the Journal of Consumer Research concluded that ‘perceived financial well-being is a key predictor of overall well-being and comparable in magnitude to the combined effect of other life domains (job satisfaction, physical health assessment, and relationship support satisfaction).’

So if you’re in a bit of a spin about your finances, the message is loud and clear – get your financial planning sorted now. Your situation might not be pretty but it is isn’t going to get any more attractive without you putting some time in to sort it out. If you don’t know where to start, the next few steps will help you:

STEP 1 – TIME TO CRUNCH SOME NUMBERS
You probably know pretty much how much you earn each month but what about how much you spend? It makes absolute sense to take stock of your expenditure in minute detail, splitting into essential and non-essential. Every bill, every meal out and every latte/ item of clothing/gadget you buy needs to be recorded. You will probably find it an eye-opening experience to tot up just how much money you spend on certain things and it will certainly create an awareness of expenditure which may help put the brakes on some of the non-essential spending. There are numerous apps available too which can help you keep track.

STEP 2 – GOAL SETTING
The majority of people share a ‘holy trinity’ of broad goals which are as follows:
1. Become debt-free
2. Have an emergency fund
3. Save enough for a comfortable retirement

Of course, the amounts required to achieve those goals will differ from one person to the next and while the first two are probably pretty easy to work out, the third one might prove more of a challenge, which brings us to Step 3.

STEP 3 – SEEK HELP
Many people are under the illusion that they are not rich enough to have a financial planner but this is a dangerous fallacy which holds many people back from attaining financial wellbeing.

Financial wellbeing is not owning a yacht or driving an Aston Martin, but it is about having the means to live the life that you want to live, and sound financial planning can help you to achieve that whether you earn tens of thousands or tens of millions. A financial planner can be useful in many different ways including:

• Helping you put a figure on your goal of saving enough for a comfortable retirement
• Clarifying which of your savings goals should be prioritised
• Assessing your attitude to risk
• Recommending products and portfolios which are suited to your goals and your attitude to risk
• Bringing an objective eye to your financial affairs
• Keeping you on track with your savings goals with regular reviews
• Ensuring your and your family’s financial security with life, critical illness and income protection insurance, as well as mitigating your inheritance tax liability
• Acting as a mediator between spouses with differing attitudes to finance
• Reviewing your strategy regularly and adjusting goals as your personal situation changes

If you don’t have a financial planner, you should choose an independent professional who favours a client focused approach, has the relevant qualifications and licences, and understands the difference between financial planning and investment management. You will be sharing some reasonably intimate information with your adviser so it is essential to find someone that you feel comfortable with.

Some people are in better financial shape than others but no one is a lost cause. The key thing is to take control of your situation as soon as possible and set clear and achievable goals, even if you start simple by reining in your spending and making a regular monthly contribution to paying off your debts. I guarantee that you will be empowered by taking action and the momentum will build. If you’d like to arrange an informal non-obligatory discussion, please feel free to get in touch.

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Sam is a UK-qualified Independent Financial Adviser and strives to raise the standards of international financial planning in Malaysia. He has been based in KL since 2009 and represents Infinity Solutions Ltd in partnership with UK-based Wealth Manager – Tilney Group. You may direct any inquiries to [email protected] or call +6017.3499 686

This article was originally published in The Expat magazine (August 2018) which is available online or in print via a free subscription.