7 Key things to focus on with your finances

Nowadays there is so much content and thought around regarding personal finance and what people should and shouldn’t be focusing on.

Unfortunately, some of this time it comes with a hidden agenda or specific bias rather than being truly helpful.

Therefore, I thought it would be useful as someone who works in the financial services sector and specialising in financial planning to give my thoughts on what is actually important to focus on in the context of personal finance and financial planning.

So here goes …

• What you contribute/withdraw each month/year/decade – to a degree the contribution and withdrawal rate have a far bigger impact than any other factor. If you don’t contribute enough in the wealth building phase it impacts the withdrawal rate required in the drawing phase and so the two are closely linked.

• How monies allocated at asset class level – essentially the split between cash, fixed interest, property, shares and alternative investments. It is fairly widely accepted both in academia and the profession that this decision directly impacts most of the overall impact from a return’s perspective.

• Allocating monies in the most tax efficient manner – this may seem obvious, but essentially making use of allowances and reliefs can help to have a significant impact on your finances.

• That it’s simple enough to understand and explain within a couple of sentences – as much as it may seem like more complex means more optimal, if it’s not simple enough to understand and keep track of then it probably isn’t.

• Consistency with expenditure – having discipline and consistency is key when it comes to all areas of finance, but particularly around expenditure. If you can get this under control and consistent rather than being uncontrolled and avoiding ‘lifestyle creep’ can really help with contribution and withdrawal levels.

• That it should be on auto pilot as much as possible – the more manual action that is required, the less likely it is to get done. We all have busy lives and therefore if we can set things up to auto pilot once it is much easier than having to take regular action.

• That it is personalised to you and your circumstances – Over the years I have often heard ‘I’ve been told by … that I should be doing this’, whether that be friends, relatives or acquaintances in the pub. They are not you and do not have your exact set of circumstances and goals in every way and don’t have the experience of actually seeing others be successful with an alternative way.

So there you have it – 7 key things to focus on when it comes to your finances.