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Starting a financial plan? Don't get fixated on your bank balance
Money isn't important, it's what it allows you to do with your life that is important, and what financial planning can help you to realise, says Andrew Brook-Dobson.
by Michelle McGagh on Nov 29, 2012 at 10:48
We’ve all thought about how much better our lives would be if we had an extra couple of zeros on the bank balance but no matter how much cash you have, if you don’t plan to use it in the right way it will not make you happy.
Andrew Brook-Dobson, director of Harrogate-based financial planning firm Brook-Dobson Brear, said money is ‘not interesting or important, but it allows us to do interesting and important things’.
He thinks that too many people are fixated on making money and how many zeros are in their bank account.
‘Lots of people get fixated on making money but for what purpose? Wealth is measured is terms of time and relationships and not the zeros in your bank account,’ he said.
‘Money does not make you happy; although everyone likes to think they are the exception to that rule!’
He said the biggest mistake when beginning a financial plan is that ‘the starting point is always the money and not the part it plays in your life’.
‘Most of us fall into the ‘too busy for’ syndrome, including myself. We are so busy being busy that we lose sight of things that are most important and do not have enough interest in making sure those things that are important get tended to,’ he said.
Leading the life you want
Unless you want to live in the woods in a tent foraging for your dinner every night then most of us will need money to lead the life we would really like. You may want to live on a private yacht in which case you’ll need substantial savings but most people would be happy to spend more time with their families and have a financial buffer available if the going gets rough.
‘Start with a budget. Loads of wealthy people are resistant to look at their expenditure because they are not spending too much but when they do they discover they are spending money, or rather wasting money, on things that have no value to them,’ he said. ‘
‘They can afford to do it but are wasting the money, for example Sky TV – lot of our clients are busy and do not watch TV but are spending £1500 a year on it; paying for something that they get no value from.’
Ensuring your budget is as efficient as it can be will free up money for you to use on things that are important – it might be a family holiday or taking the kids out for a monthly treat – or have some money each month that you can save for a rainy day.
Whatever your goals, you need to look at how your money is working for you and whether it is helping you to achieve what you really want.
Financial Planning Week runs from 26 November to 2 December and is organised by the Institute of Financial Planning to raise awareness of the profession and help consumers make the most out of their money. You can find out more here.
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