Financial planning is about much more than simply growing your wealth. Not only can it reduce financial worry, but it can help you achieve long-term goals, reduce stress levels, and increase your mental wellbeing.
Perhaps you feel like you don’t have enough time to spend with those you love? Or maybe you’re striving for early retirement but you’re not sure how to get there? Financial planning exists to guide you through these issues with confidence.
Pandemic burnout and the increased work week
Covid-19 has influenced almost everything since early 2020. The Guardian reported earlier this year that UK workers have increased their working week by 25% since working from home.
In the UK, the average time spent on a business network each day increased from 9 to 11 hours. However, employees aren’t the only people affected; two in five company owners reported struggling with depression, anxiety, or exhaustion in 2020 and early 2021.
Not only have people been working longer hours, but now the line between work and leisure has blurred. Many people have complained of an inability to switch off after a workday.
Financial planning could help to strike a much-needed balance between work and life. But how?
Helping you strike a better work-life balance
Often, financial planning is associated with building wealth. While this may be part of the process for some people, it’s not always the case. Financial planning focuses on how to help you achieve your goals.
If you’re in a position where you want to start cutting back working hours or taking other steps to achieve a better work-life balance, financial planning can help you understand what your options are. By looking at what is most important to you, a bespoke financial plan could give you the option to reduce how much time you spend on work. In some cases, this may include cutting back on outgoings, depleting wealth, or adjusting other steps you’ve been taking.
Rather than assessing how much money you have, the process of financial planning is about understanding what makes you happy and how money could you achieve these things. With work affecting other aspects of life, rethinking your work-life balance could improve your wellbeing.
A demanding job may mean you’re able to afford a nice car or a large family home, but if you’re unable to take the car for a drive or spend as much time as you’d like with loved ones, is it worth it? For some, rethinking their job will be appealing.
According to an Aegon report, just 4 in 10 people have thought about what gives their life joy and purpose. Spending some time thinking about this and making the answer central to your plans could help you get more out of life.
So, how does financial planning help here? It can help you understand the type of lifestyle you could still achieve if you did step back or how other assets can bridge an income gap. It can give you the confidence to create a work-life balance that suits you.
Striking the right balance as you near retirement
It’s not just getting about getting the right work-life balance now either. Financial planning can help provide more opportunities in your later years.
Since Pension Freedoms were introduced in 2015, which gave retirees more flexibility when accessing their pension, transitioning into retirement has become more common. Cutting back working hours or moving into a less demanding job has become a popular way to ease into retirement. It can help you create a work-life balance that suits your lifestyle goals.
Transitioning into retirement is appealing for many as it can still provide structure and meaning to your days, while still giving you more free time.
But is it something you can afford to do? Or are you hoping to retire earlier than the traditional retirement age?
Financial planning can help you take steps to give you the freedom to create the retirement lifestyle you want. It can give you the confidence you need to make retirement decisions that make sense for you.
If you’d like to discuss your finances and how they can help you live the life you want, please contact us.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.
Richard Fyfe is a Chartered Financial Planner and a Director of Fyfe Financial.