I love every aspect of my role as a financial planner.
Meeting clients, researching, fact-finding, explaining, and advising are crucial elements of my day-to-day work. It’s rewarding, challenging and enjoyable, but there’s one side of financial advising that you might find a little strange.
Surprise, surprise
Would you be surprised to hear I have to give my clients permission to spend their own money?
Let me explain
Let’s call her Jane – a lovely lady who came to see me for the first time last year, following her separation after 20 years of marriage. An excellent local family law specialist supported Jane through her divorce and recommended that I help her deal with some unresolved financial matters.
Jane had found the divorce process devastating. Losing her father only a year earlier left her feeling like the most stable influences in her life had been taken away. Understandably anxious, Jane confided that she was well cared for by her doctor, and medication was helping a little, but worrying about her finances kept her awake at night.
Grief, loss, and financial uncertainty were all contributing to her distress. Retirement seemed a long way off. With two or three years to go in a job she disliked, Jane felt trapped.
A distant dream
Like many women, Jane had preconceived ideas about retirement. She assumed retirement meant age 60. Early retirement hadn’t crossed her mind.
If you’ve read my other blogs about the financial planning process, you’ll know my starting point: questions and more layers of questions. Never too intrusive, a good financial planner will gather the information they need to be able to advise you without overwhelming you.
I showed Jane how, using a lifetime cash flow forecast, she could stop worrying about running out of money during her lifetime.
Can you imagine Jane’s delight when I told her she could retire immediately?
Her dream of stepping away from work was about to become a reality: no more commuting to the office and struggling through the day.
She handed in her notice and gave up work a month later.
What happened next?
There’s an epilogue to this happy tale.
I met up with Jane on the first day of her retirement. We drank coffee and talked about her plans. Jane was visibly happier, but it was clear something was on her mind.
Jane mentioned a local health club and her plans to swim and take classes two or three times a week. After the divorce and loss of her father, she knew she wanted to get fitter and feel healthier. Monthly membership at the smart gym was £50, and Jane wasn’t sure she could afford it.
Jane had more than £500,000 in cash savings and investments. We’d worked through a comprehensive financial planning process. Using conservative assumptions, I demonstrated that she could afford to stop working and not worry about running out of money.
Jane couldn’t give herself permission to spend £50 a month on a gym membership. Why?
Permission to spend
Jane’s late father was a huge influence. He had taught her about money as a young girl, instilling in her the value of savings. With the tools she needed to budget well and save for the future, Jane had never been taught about permitting herself to spend.
Our attitudes towards money are often rooted in our childhood experiences. Our parents’ lessons about saving and spending money stay with us into adulthood.
Permitting ourselves to spend confidently may feel unnatural. We may need extra reassurance from a financial planner that our spending plans are affordable.
Jane’s now a regular at the gym. She tells me she feels fantastic, and having a financial plan brings a sense of relief and financial freedom.
To find out how bright your retirement could be, give me a call. I’d love to help you.
Book a FREE discovery call HERE.
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