Planning

‘Planning’ is a frightening word. That’s because you think it means ‘making a plan’.

It doesn’t.

‘Making a plan’ is a one-shot act. It may suit a few of you. But most of you it won’t.

Planning is a continuous process to develop understanding. It’s not a one-off task.

It’s very personal. Some of us are goal-oriented and live structured, organised and focused lives. Some of us prefer to just sort of muddle along, picking the daisies on the way. And some of us do a bit of each - launching into the unknown, but occasionally taking a bit of time off to scan the horizon.

You need to have a general idea of what you are trying to do. And you need to tweak this as life happens to you.

Here’s what you do

What you must do is talk, with your friends, your family, your knowledgeable acquaintances, and particularly with your life partner.

At the same time develop and continuously modify a plan of action - what and why and how to spend, what and why and how to invest.

• Keep an eye on the headlines for tax & pension changes.

• Use professional advice occasionally, watching what we have to say about costs.

• Repeat.

Here’s what we do

Through this site we give you the understanding and the tools to frame your discussions and manage your advice

Maths

We do not mention Maths. The claim that Maths is necessary for good money management is off-putting. And makes you believe that you will never be able to do it properly. It is one of the reasons for the low standards of financial literacy in the UK.

You need Maths to get a job in Finance. You don’t need Maths to manage your money. You just need understanding.

It helps to be able to add and subtract and to know what a percentage is.

Budgeting

This is a word that can mean different things.

One meaning is popular with businesses: they set a detailed spending plan for perhaps a year ahead and monitor their spending against these numbers. This may suit certain types of people, but not necessarily you. And it’s wrong to suggest it is an essential part of money management.

However you need to find a way of checking whether your actual expenditure is within limits that you intended. It might suit you to set absolute spending limits per month or week in different categories. These limits could be described as a budget. But it’s a very different process.

Let’s put it this way: you need to find a way of developing understanding of the financial effect of your current life and spending practices; and also the effect of changing them in the future.

Process

A more flexible way of doing this might be: - review your bank statement periodically, see if your free cash has gone up or down, make some notes, see how what you have learned impacts your longer-term plans. Repeat.

Increasingly, your discussions will become more informed. Increasingly, you will be able to make and refine decisions about your spending habits and life intentions.

As always it’s a process, not an attempt at a one-stop solution.

Next

However this simple structure must be embedded in a complicated world that we need to help you navigate. If you decide to invest in shares, for example, there are a number of different ways of doing it and you have to decide which way to use.

It’s time for the Easy Money lesson.