The benefits of cashflow planning

At Logic Financial Services, we are led by your long-term goals. As well as getting to know you through fact-finds, we have tools to ensure that your financial plans are right for you.

One of these tools is cashflow planning. It’s a great way to understand your finances in the present while helping you to visualise your future.

It’s a valuable tool and one that forms a standard part of the financial plans we build. But how does it work? And what are its benefits for you?

Keep reading to find out.

Cashflow planning can help increase your future wealth

We use cashflow planning to assess your wealth now, and then forecast how this could change in the future.

We might use models to map the effects of increased pension contributions – using different growth rates or levels of withdrawals – or to calculate the impact of moving savings into investments. The latter is especially important at times of high inflation.

We can find patterns in your income and outgoings and map the approaches that are most likely to work for you.

It’s also a great tool to use as you approach the later part of your working life as it can help you decide whether you have “enough” to retire. What’s more, it can assess the likely impact of any potential future changes to your circumstances (for example, needing to pay care fees).

To use these tools successfully, we need to understand the differences in your necessary, discretionary, and aspirational spending habits. We need all available information, and it needs to be up to date too.

By getting to know you, having a full understanding of your financial circumstances, and by conducting regular reviews, we can ensure that our models are accurate and that your goals are attainable.

3 benefits of cashflow planning

There are many ways in which using cashflow planning can help you create a secure financial future. Here are just a few:

1. It can help you to visualise your future

As with any type of planning, the process itself is a great way to start thinking seriously about what you want.

Visualising your dream retirement – and passing that vision on to us – means that we can factor these goals into our models, starting from a solid foundation and having a definite goal to aim for.

2. You can factor in the impact of real-life events before they happen

Once we have a clear understanding of your future goals, we can put a plan in place to help you achieve them. We can also factor in the life events – both positive and negative – that could influence that journey, hastening or delaying your arrival.

Marriage, divorce, having children, moving to a new house, or becoming unemployed – all could severely affect your ability to reach your financial goals. By forecasting the impact of these changes, we can either capitalise or mitigate their impact, helping your retirement dreams become reality.

3. You can be sure you are making informed decisions

Cashflow modelling tools, based on correct and up-to-date information, give you the chance to see the impact of future changes and make informed decisions.

We can help you understand the impact of changes that are within your control, by getting to answer some important questions, such as:

• Can I afford to retire earlier than planned?
• What if I need care when I’m older?
• Will I be able to help my children onto the property ladder?

We can also look at those things in the wider world that are outside of your control:

• What will happen to my investments if the market dips?
• What if I’m made redundant or have to give up work through accident or illness?
• What is the impact on my plan if inflation continues to increase?

Cashflow planning can provide the answers to these questions, giving you confidence in your financial plan, a sense of control over your future, and peace of mind that you’ll maintain your financial security whatever the future throws at you.

Get in touch

Forecasts are only as good as the information put into them and are based on assumptions at any given time. By conducting regular reviews, we can make sure our modelling remains as accurate as possible.

If you’d like to discuss how cashflow modelling could help you plan for your future, or you’d like to discuss any other aspect of your long-term financial plans, get in touch. Please email us at info@logicfinancialservices.co.uk or check with your adviser.

Please note

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.