How to get started with your post-COVID financial plan

Written by Andrew Dunbar, Director and Senior Financial Adviser, Apt Wealth Partners.

Financial downturns, like the one caused by COVID-19, are often touted as “once-in-a-generation” events. But the reality is that they can and likely will happen multiple times during your lifetime, so it’s a good idea to get yourself in a position to weather financial storms now.

Today I want to talk about some of the core areas of financial planning and share our tips to get you started on the path to a healthier financial future.

#1 Align your spending with your values

This is an area people often overlook when it comes to planning finances, but for me, it’s a critical one, and one of the places we start when working with a new client.

Your money should act as an enabler that supports your goals and the way you want to live your life, but for many there is a big disconnect between spending habits and these values. Before setting a budget, it’s incredibly helpful to understand your personal values and how they impact your spending. This way, you can create a budget that actually supports the way you want to live your life, rather than limiting it.

When it comes to defining values, I often tell people to think about what they would like others to say about them at a milestone birthday or even at the end of their lives. This is a good way to determine what is actually important to you – and what that looks like will be different for everyone.

It’s one of the things that can surprise people about financial advisers: we aren’t here to tell you where and how to spend your money, we are here to help you make better use of it to live the life you want - whatever that looks like.

#2 Understand where your money goes – and make better use of it

Budgeting is often thought of as an exercise in self-denial, but it should actually be about making better use of your money and getting more out of life. Once you know what’s important to you, you can review where and how you are spending your money to find areas that don’t align.

Most people will find some areas where they can change their spending habits with little or no impact on their lifestyle. Of course, these areas are different for everyone, but some of the common areas we see are cancelling unused subscription services or memberships, getting a better deal on utilities and other bills, or making small changes to takeaway food and beverage purchases. Get started by reading our saving tips here and downloading our budget planning template here.

#3 Structure finances to weather storms

One of the benefits of working with an experienced and client-focused financial planner, like Apt, is that you have a personal finance coach on your side, who is always planning for the unknown. And when a downturn happens, they’ll make sure you are not only in the best possible position to weather the storm, but also to take advantage of any opportunities that arise.

For example, during the Global Financial Crisis, many Apt clients actually increased their share market exposure in their superannuation, bucking the trend, which they benefitted from as markets recovered. This is because we help our clients structure their assets, like superannuation, to minimise risk and maximise opportunity. You can read more on structuring your super or watch the video here.

#4 Revisit and recalibrate regularly

Your financial plans should never be set-and-forget because, whether it is individual life events or global ones, things can and do change. Your values will most likely shift whenever there is a major life event, such as marriage, children, property purchase, downsizing or retirement, so it’s important to set regular check ins.

This is another area where a financial adviser can really help, ensuring you not only revisit your plan regularly, but structure it in such a way that it is simple to recalibrate effectively when something changes.

For example, many of our clients had planned overseas travel this year, and this, of course, changed. Because we develop a deep understanding of each individual client’s goals and values, we were able to help them pivot quickly and divert these funds in an effective way. For some, this was about looking at investment opportunities while the market was down, for others it might have been paying down debt sooner or putting the money towards another life goal.

When it comes to recalibrating your plan, it should always be about keeping you focused on your values and goals, and the right adviser will have a in-depth overview so that you can make moves quickly and effectively when things change.

#5 Make a start

When it comes to your finances, inactivity is your enemy. If COVID exposed financial vulnerabilities for you, it’s important to make a commitment and simply get started.

As outlined above, reviewing and aligning your spending and your values is a great place to start. But if you have gaps in your financial knowledge, addressing these is also an incredibly helpful start – in fact, financial literacy is tied to financial outcomes in almost every area, from everyday savings to retirement. The Apt Knowledge Centre has a wealth of information, from calculators to education modules, and you can access it free here.

If you’re not sure where to start or would like to find out how a personal finance coach can help you get back on track and reach your goals sooner, get in touch to organise a complimentary chat.

General Advice Warning

The information provided in this blog does not constitute financial product advice. 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 (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.