Five Financial Planning Dos and Don’ts

Five Financial Planning Dos and Don’ts

Financial planning is an essential life skill that is often overlooked, regardless of income level or financial status. It can help individuals and families make informed decisions about money, prioritize spending, and identify and achieve financial goals. As you progress through the new year it’s time to revisit your financial plan and make any necessary adjustments to ensure a financially secure future. Here are some dos and don’ts to help you get started.

Dos:

  1. Set achievable financial goals

It is important to have a vision of what you want to achieve personally and align your finances accordingly. The size of the goal is irrelevant. Visibility and relevance are important. Goals could range from paying off debt to saving for a down payment on your first home to finalizing your retirement. Write these goals down, prioritize them, set deadlines, and track your progress as time passes.

  1. Make saving a priority

Creating a sufficient savings plan and holding yourself accountable will ensure your success. Savings is a habit and will become easier the more you do it. We recommend an annual savings rate of 20% of your gross income from all sources. Where possible, utilize employer-sponsored retirement plans & pensions to save in tax-advantaged accounts and automate the process by having your savings taken from your pay before it hits your bank account. Your biggest enemy is lifestyle creep which can steal from your future self!

  1. Create a budget

A budget is a powerful tool that helps you keep track of your income and expenses. Start by listing your monthly income and all your fixed expenses, such as rent, utilities, and insurance. Then, estimate your variable expenses, such as food, entertainment, and transportation. Finally, compare your income and expenses to determine if you have a cash flow surplus or deficit. This will help you better understand how much you have available to save or if you are living beyond your means. If you discover the latter you should put some effort into changing your spending to ensure you can make room for savings which are an investment in your future.

  1. Invest in yourself

Investing in your personal and professional growth can have a significant impact on your future financial well-being. This can include taking courses, attending seminars, or pursuing additional certifications. The knowledge and skills you gain can help you advance in your career, increase your earning potential, and improve your financial future.

  1. Seek professional advice

If you are unsure about your financial plan or have questions, it’s always a good idea to seek professional advice. A financial advisor can help you make informed decisions, guide your investments, and assist you in reaching your financial goals.

Don’ts:

  1. Confuse wants with needs

The age of the influencer has skewed the lines between reality and fantasy for many people when thinking about money. It is important to be realistic when setting goals and prioritize what you NEED over what you WANT. For example, you may WANT to utilize all of your savings on the deposit on a new house, but you NEED some amount of liquid cash at all times as an emergency fund.

  1. Ignore debt

Financial planning is like time travel.  When you save money, you are shifting resources from the present to future. When you borrow, you are bringing resources from the future to pay for current expenses.  Do you want to own your future or owe your future. If you have outstanding debt, creating a plan to pay it off is vital. Compounding interest in your savings account is amazing. Einstein called it the eighth wonder of the world.   Compounding interest on your debt has the direct opposite effect. There are many methods to accomplish this, but generally, you should focus on paying down the debt with the highest interest rate first. Make this a priority in your financial plan but do not use all of your emergency fund cash to pay down debt early. This could create more debt if you have an unexpected medical bill or some other expense that you must put on a credit card since you have exhausted all of your cash.

  1. Be a victim of Lifestyle Creep

Be conscious of impulsive spending and avoid lifestyle creep or lifestyle inflation. This is what happens over time as you progress in your career and earn more money but spend it all instead of increasing your savings proportionally. This is easier than ever nowadays as subscription services, online shopping and contactless payments have made spending money so easy it is almost a thoughtless process. When reviewing your budget each year, be sure to look at how much your expenses go up in relation to earnings and savings.

  1. Ignore your retirement plan

Many people avoid thinking about retirement until it’s only 5-10 years away.  Retirement may seem far off, but it’s essential to start planning and saving for it as early as possible. Putting off retirement planning and not saving enough as a result can put you in a situation later in life where you need to make significant lifestyle sacrifices or accept delaying retirement.  The earlier you start, the more time your money has to grow and compound and your retirement goals will be more secure.

  1. Avoid estate planning

Ignoring the basic estate planning documents, like a will and lasting powers of attorney (for health and wealth), could put your assets at risk and leave your family in a financial bind. It can also affect your ability to retain control of your assets and make critical decisions around your healthcare if you were to become mentally incapacitated. Meet with a qualified estate planner and incorporate the basic estate planning documents into your financial plan as soon as possible to protect you and your family against the unexpected.

There is no one-size-fits-all approach to financial planning and it can vary depending on your circumstances. Nonetheless, it is critical to securing your future and ensuring you stay on track as life changes from year to year. By setting achievable goals, creating a budget, investing in yourself, making saving a priority, and seeking professional advice, you can make informed decisions about your money and achieve financial stability.

If you are unsure how to approach financial planning for your own situation, or have questions on how to accomplish your goals, Tanager Wealth Management can help. Contact us to start financial planning journey and make the most of your money. 

Further articles on Investing

investments
Kris 460x280 1
ESG Philosophy

Secure your financial future

Our team of experts are ready to discuss your financial future.

Close
Abbas Somji

Abbas Somji

PARTNER AND FINANCIAL ADVISOR

Abbas moved to London in early 2018 to be with his British wife. Born in the United Kingdom and raised in Botswana, Abbas then migrated to Houston where he attended University. He began his professional career at an RIA in Houston and holds the Series 65 license and US CFP® . He brings with him a decade of experience in advising High-Net-Worth clients and business owners. Abbas is a Partner and Advisor and ensures he’s helping clients navigate the complicated world of being an expat in the UK. He particularly enjoys providing clients with the clarity and confidence to pursue their financial goals. A sports enthusiast, Abbas enjoys conversing about and playing soccer/football and attending Liverpool matches.

Read more… Abbas Somji, Beyond the Bio

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
Alistair Jackson 8165 Edit

Alistair Jackson

FINANCIAL ADVISOR

Alistair joined the team at Tanager in 2019 following his completion of an MPhil in English at the University of Cambridge as a John Crook Scholar. With three years of experience working across our Investment and Financial Planning teams, Alistair transitioned to the Advisor Team in January 2022. His time is now focused on the production and implementation of robust planning and investment strategies for our clients on either side of the Atlantic. Outside of the office, Alistair’s time is divided between exploring East London’s many food markets, spending time with friends and family, and travelling abroad.

 

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
david c 6001

David Costello

PARTNER AND FINANCIAL ADVISOR

David arrived in the UK on New Year’s Day 2014 and brought with him fifteen years’ experience advising private clients and business owners. He attained the U.S. Certified Financial Planner designation in 2007. David specialises in building financial plans for UK based households that include US taxpayers and is tirelessly committed to helping Tanager clients maximise their wealth and achieve their stated goals and objectives while navigating the US/UK tax and investment landscape. David is a Non-Hodgkins Lymphoma survivor and is active in volunteering and fund raising for the support toward the treatment and eradication of blood cancers.

Read more… David Costello, Beyond the Bio

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
Gail Hamilton King

Gail Hamilton- King

FINANCIAL ADVISOR

Gail joined Tanager in 2021 as a financial advisor with more than fifteen years of experience in senior investment banking and management consulting roles at Morgan Stanley and Deutsche Bank. She enjoys leveraging her financial experience to make a tangible difference for Americans living in the UK by helping to manage their complex finances globally. Gail moved to the UK from Chicago to complete an MBA at London Business School. As a dual UK/US family living in west London, she understands the challenges our clients face.

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
Jeremy Bailey 8192 Edit

Jeremy Bailey

SENIOR FINANCIAL ADVISOR

Jeremy joined the Tanager team in 2019 bringing fifteen years of experience in helping clients align their finances with what is most important to them. He specialises in retirement income strategies and multigenerational planning. Jeremy decided to leverage his US/UK dual citizenship status to relocate to London in 2017. He quickly identified the breadth of financial challenges faced by Americans and US connected families living and working abroad. Jeremy comes to London via Cleveland Ohio and Miami Florida. In his free time, he enjoys running the Thames path, spending time outdoors, and travelling.

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
Kris Heck

Kristopher Heck

MANAGING PARTNER

Kristopher has lived in London since 2007 and combined his ten-plus years of experience in the Institutional Asset Management Industry in the US and Europe and personal experiences as an expat to found Tanager. A founding partner and Chief Investment Officer, Kris has been a guest lecturer at the London School of Economics and has particular interest and experience in portfolio efficiency – encompassing tax, cost, and the optimal risk budgeting of a client’s assets. Kristopher is an avid fan of the Baltimore Orioles and enjoys going back to Maryland whenever he is able to.

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
Kyle 4262 Edit 1

Kyle Pettigrove

PARTNER AND FINANCIAL ADVISOR

Kyle is a Certified Financial Planner ™ (CFP ®) and joined Tanager in London in 2016 having moved to the UK with his fiancée. A US/UK dual citizen and Philadelphia native, Kyle previously worked as a financial advisor in the US specializing in retirement planning. Now spearheading Tanager’s stateside office in Philadelphia, Kyle brings both relevant personal and professional experience to his role and covers the areas of pensions for US residents, British expats and transatlantic families living in the US. Outside of his work life, Kyle is an avid traveller and craft beer enthusiast.

Read more… Kyle Pettigrove, Beyond the Bio

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
nicole website

Nicole Ralph

SENIOR FINANCIAL ADVISOR

Nicole joined the Tanager team in 2020 and brings over fifteen years of senior leadership and client experience in helping US expats and foreign nationals relocating to the US. Nicole has held the CFP® designation since 2011 and earned an MBA from the Wisconsin School of Business in 2016. As a dual US/UK citizen herself, she is intimately aware of the complex challenges facing families, having moved back and forth three times with her own family. She now lives in Hove with her husband and youngest daughter. In her free time, she enjoys walking her dog along the seafront, hot yoga, learning Italian and travelling.

Read more… Nicole Ralph, Beyond the Bio

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
Patrick 4463

Patrick Mulhern

PARTNER AND FINANCIAL ADVISOR

Born and raised in New Hampshire, Patrick moved to Scotland at seventeen to study at the University of St. Andrews and has been picking up knowledge of life on both sides of the Atlantic ever since. A Partner and Financial Advisor, he specializes in complex planning for high-net-worth clients, international estate planning and inheritance issues. Prior to working in Financial Planning, he worked for a trust and estate law firm and co-wrote the book Estate Planning to Die For. Patrick lives in Sussex with his wife and children. He gets back to New England as often as possible and is one mountain short of having hiked all 4,000 Footers of the White Mountains.

Read more… Patrick Mulhern, Beyond the Bio

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
Susan 4430

Susan Blaylock

FINANCIAL ADVISOR

Susan joined Tanager in 2019 upon moving to London. She is a Financial Advisor and has over a decade of experience in the financial services industry, mainly as a CPA. What she loves about financial planning is the opportunity to help people understand and achieve the financial goals that are most important to them. She enjoys the challenge of working with the complex situations of US expats. Susan shares Tanager’s philosophy of developing strong relationships with clients and gaining a deep understanding of their financial situations and life goals. Outside of work, Susan enjoys exploring, including hiking in the Alps, canyoning, kayaking London’s canals, cycling, and spending time with friends and family.

Read more… Susan Blaylock, Beyond the Bio

envelope icon
in icon
  • email icon
  • linkedinn logo
Close
Tori Bown 7230 Edit

Tori Bown

FINANCIAL ADVISOR

Tori joined Tanager in May of 2022 after moving to London in late 2021 to join her English Husband. Prior to joining Tanager, Tori worked in Dallas, Texas for a large wealth management firm for over five years where she specialized in financial planning for high net worth clients. As a Certified Financial Planner ™ , she’s developed a holistic approach to wealth management that incorporates all aspects of a person’s financial life. Tori enjoys helping clients define and achieve their financial goals by enabling them to put context around their finances.

envelope icon
  • email icon
  • linkedinn logo
Scroll to Top