A cash-flow plan shows your current and future financial position. Providing a detailed look at the money coming in and going out throughout your lifetime; it’s a fluid picture which allows for all eventualities. Cash-flow planning is a key component in a robust financial plan, as it forecasts your finances over your lifetime with your goals in mind. Accounting for various scenarios such as periods of high inflation, low investment returns and changes to your circumstances.

At Balance Wealth Planning, we provide our clients with a cash flow plan as standard when they first see us and every year after that. And we wouldn’t have it any other way!

What is a Lifetime Wealth Forecast?

We often refer to this as being a key part of your financial plan. It’s a forecast constructed using sophisticated software which allows us to model your financial future. It takes account of your income, spending, your wealth and debts now and models how they might change in the future. It also accounts for the impact of tax and inflation. We usually create several ‘What if’ scenarios, demonstrating what would happen if different decisions were made, or if your plan was put under strain by a change of circumstances.


The benefits of cash-flow planning

Why are we such passionate advocates of cash-flow planning, you might ask. There are lots of different reasons:

  • Peace of mind – When making major financial decisions, like when to retire or splashing out on a once-in-a-lifetime holiday, although we can’t predict the future, it’s nice to check to see if there will be any future impact before you do. Giving you that peace of mind to go for it.
  • Timing is everything – You might know what you want to do, but maybe not when. Retirement is often a common culprit for this. You know you want to do it, but realistically when is that possible? Well, cash-flow planning can provide you with that insight.
  • Visualisation – it’s a graphic representation of your financial roadmap. Much like a jigsaw, there are so many pieces to your financial situation, and cash-flow planning helps put those together for you.
  • Resilience – We test out those ‘What-if’ scenarios that you’d rather not happen, like falling ill or the investment markets taking a tumble. But, by showing you those worst-case situations, you can see how resilient your finances will be.
  • Confidence – making an informed decision is empowering, and cash-flow planning gives you the confidence to know you’re making the right choice at the right time.

Our financial planners truly believe that life is for living, and money is to be enjoyed whilst you can. But only if there is a strong cash-flow plan to support that first.

Successful cash-flow planning

To be able to provide you with a comprehensive cash-flow plan, there are a few areas we need to understand about you first, as well as assumptions we have to make:

  • Current and future income sources – your income will change throughout your life. In an ideal world, this figure would increase with job promotions, selling a property, or receiving an inheritance, but it is also vital to plan for if unexpected circumstances arise. So first, we need to know your current income streams and future sources. Once we have those, we can plot them in your cash-flow plan and suggest any changes to maximise their potential.
  • Expenses and life goals – You can never ‘plan’ for extra expenditure in life; however, this is always something to set some money aside for. Life goals such as travelling, helping your children/grandchildren and retirement are all common factors we consider. Maybe you want a new car every five years or to downsize your home at some point in the future. By drilling down into the small details of your current and future expenditure plans, we can make sure it’s affordable to you.
  • Inflation and investment returns – successful cash-flow planning must be based on realistic financial assumptions. We factor in inflation and investment returns on varying levels to ensure your plan can withstand all economic climates. Whilst we can’t predict the future, and no cash-flow comes with a guarantee, this helps prepare you for the next phases of your life.

Working with a financial planner on your cash-flow

We know finding the right financial planner is a very important decision. We know we do things a little differently, but rest assured that our goal-oriented, holistic financial advice is a great option for you. To start your cash-flow planning journey, book a meeting or contact us to discuss your financial situation further.

What our clients say

Working with Balance: Wealth Planning

Read more