7 reasons why people defer financial planning
There will be less and less State intervention to retirement and pensions in the future. We are now seeing a greater focus to provide for ourselves and to make our own future provisions.
We know we should be planning our financial future to create greater levels of security and certainty. We also know that delaying a decision probably means we are less likely to achieve our financial goals. So why do people put off their financial planning and what can we do to support them to act now?
The 7 main reasons why people defer:
1. They don’t know where to look for information
All the information people need is available at their fingertips. However many are unsure of the validity of this information and whether it can be trusted.
2. They find it complicated
Our role is to help simplify the complicated and make financial planning easier to understand. Anyone who finds financial planning too complicated should still take action. By not doing so, they are condemning themselves to a harder life than needed.
3. They want quick results
This is a serious problem. The media often suggests the solution to our financial woes is some sort of quick fix. The reality is that it is extremely rare for people to get rich quickly. Most people who have ‘made it’ got there extremely slowly and with a plan in mind.
4. They just want someone to tell them what to do
We see this a lot. If you are fortunate to have money to start with then this is probably a viable option. We often act for clients that are capable of creating their own financial plans and working out their own finances. Most of them come to us because they value their time and want to focus on different projects. They prefer for us to ensure that they remain secure and they avoid costly mistakes.
5. They think it’s not affordable
Unfortunately, this is a reality of the modern world. Although we earn more money than previous generations, modern life still seems to suck all our resources and money.
The reality is that anyone can afford it; they just need to understand their priorities. Financial planning is about prioritising spending and working out how to pay for what is most important.
6. They can’t see past the short-term
This is a genuine difficulty for many people. It is hard to think past your immediate life, especially 20 or 30 years into the future. Financial planning is about visualising how you want your life to be in the future then building a plan backwards from there, creating a plan of action to make that dream a reality.
7. They don’t put their trust in financial institutions
There is an understandable cynicism with the Financial Services industry. The 2008 credit crunch undermined public trust. There is a perception that banks, pension providers and financial advisers put their short-term interests and profits before clients.
A good financial adviser will work with you to create a realistic plan to achieve the life you want in retirement.