How to create a robust financial plan

Published on: July 1st, 2024

Creating a robust financial plan is akin to building a roadmap for your future. It’s about understanding where you are, deciding where you want to go and then laying down the steps to get you there. And it’s not just about improving your finances. A robust financial plan can give you peace of mind, improve mental and physical health, and ensure you live more meaningfully.

At Apt, we see the transformative power of financial planning every single day. It really is about more than money; it’s about living the life you want today and tomorrow. So, whether you’re starting from scratch or looking to refine your existing plan, here are the essential steps to building a robust blueprint for your financial future.

#1 Know what’s important to you  

If financial planning is a journey, your values can be considered your compass. Values-based financial planning goes beyond numbers; it’s about making financial decisions that resonate with what genuinely matters to you.

It’s often said that money can’t buy happiness, but that’s not entirely true. Money saved, invested, donated and spent in the right areas can help you live a happier existence, achieve meaningful goals and leave a lasting legacy.

If you haven’t reflected on your values in a while, download our free values roadmap to help you get started.

#2 Know where your money is going

To continue the journey analogy, you’ve set your compass, and now it’s time to understand your current surroundings. Knowing your financial position isn’t just about your key assets and liabilities. It’s about deeply understanding how much money comes in and exactly where it goes. Understanding this information at a granular level is critical to making informed financial decisions.

A budget doesn’t have to be about austerity; it is a simple, detailed understanding of what comes in and what goes out. Having a detailed budget enables you to move the dial quickly if or when something needs to change. It also allows you to see any minor tweaks that can make a notable difference without impacting your lifestyle.

Creating a budget also allows you to develop an accurate system to better manage your money. A good strategy is to work out your monthly surplus and then ‘pay’ yourself on the first of each month. You can then break that money into what you want to do with it, from paying down debt, funding children’s education and contributing to superannuation to travel and leisure expenses. This will help you stay on top of your funds on an ongoing basis.

#3 Know where you want to go  

The next step is to be clear on your destination. If you’re making financial decisions without knowing where you want to end up, it’s like deciding how you’ll get somewhere without knowing the destination.

For many of us, the ultimate goal is financial freedom. What would that look like for you? What would it enable you to do more or less of? Visualising this is an excellent way to keep you on track when life inevitably throws some curveballs.

#4 Know what you need to do to get there

Now that you know your destination, it’s time to set the goals and milestones to get you there. It’s also important to focus on achieving balance. While getting caught up in how quickly you can reach a goal can be enticing, we don’t know what is around the corner. It’s also about considering when and how you’ll buy a happier time.

So maybe that family trip to Europe will put your mortgage repayment goals back a few months, but if it is going to make lifetime memories, it might be a worthwhile trade-off. Of course, trade-offs will differ for everyone, and it’s essential to be clear about yours.

#5 Know how you’ll get there

Now that you know where you want to go and the milestones along the way, you can decide how to build the investments and income streams to get you there.

Investing is a powerful tool to grow your wealth over time. However, it’s essential to approach it with a clear strategy that aligns with your financial journey, risk tolerance and investment horizon. It’s wise to consult a financial adviser to tailor an investment strategy that suits your needs and goals.

#6 Know how you’ll protect your journey  

Most of us wouldn’t consider leaving our house or car uninsured, yet many of us still leave our biggest asset uninsured – our future earning potential. Unfortunately, life doesn’t always go to plan, so the right personal insurance is critical.

An emergency fund should also be part of your defence. Fast access to around six months’ living expenses is a good goal and can be a lifesaver when the unexpected occurs.

Estate planning and writing a will are essential parts of this puzzle, too, ensuring your loved ones can maintain their lifestyle and not stress about money should an accident, injury or illness occur.

#7 Know when to change course

Finally, remember that financial planning is an ongoing process. Your financial situation and goals will likely evolve, so reviewing and adjusting your plan periodically is important. This could mean rebalancing your investment portfolio, revising your budget or setting new financial goals.

Creating a robust financial plan is a dynamic and iterative process. By following these steps and seeking guidance from your financial adviser, you can lay a strong foundation for financial security and peace of mind.

And remember, it’s never too late to start. The best time to start planning your financial future is yesterday, but the second-best time is now.

Need support on your journey? Reach out to the Apt Wealth team for a free consultation.


General Advice warning

The information provided in this blog does not constitute financial product advice or a recommendation to purchase a particular product. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners Pty Ltd is not a registered Tax Agent. You should consider your individual situation and seek tax advice from a registered tax agent before making any decision based on the content of this document. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.