Getting financially organised is your first step towards a better financial future

This is a story about Andy and Amy (not their real names). Andy is an enthusiastic entrepreneur with a reputable position in his industry. A successful man and earning a good income, however, his expenses were high as well. After marrying Amy, he became stressed with his finances, which worsened with the birth of their first child.

The pressure of the monthly deficit of approximately RM2,000 and worrying about the future expenses triggered the couple to engage our services. I was then able to we help them through with our holistic financial planning service.

Andy and Amy have different attitudes towards managing their personal finances. Andy is a very positive person who anticipates that good things will happen in life as long as he strives for it. “Tell me what I need to do and I’ll make it happen!” is his favourite motto. He applied this attitude to his finances, which often resulted in him committing to things he cannot afford today, but with the conviction that he will be able to grow his income and pay for it in the future.

Amy is almost the polar opposite when it comes to money. She’s cautious and prefers to plan ahead and be prepared for the worst situation. Indeed, the desire for a more secure future was amplified after having a child.

A clear visual reality of their current family’s financial situation was provided to them through our holistic financial planning process. The hard facts and numbers seemed ruthless but it showed them the gap between their goals (purchasing a bigger home, tertiary education funding, retirement security, etc.) and their available resources. In addition to the risk of not being able to achieve their desired goals, as a single income family with a child, there were other potential risks that needed to be addressed, such as Andy’s insufficient insurance coverage for the family’s income needs (should something untoward happen to him) and the lack of estate planning tools in place to safeguard his family.

We helped Andy and Amy tidy up their cashflow, focusing on their expenses as there were many loopholes and excesses that could be avoided or minimised with good budgeting. For example, we noticed the huge amount spent on dining out and impulse purchases. During the financial planning process, there were some unavoidable differences of opinions between the couple, but fortunately we were able to help them manage their expectations and bring them to work together towards their common goals.

The role of a financial planner is unique. We not only provide clients with relevant and timely financial advice, but we also take on the responsibility of educating them to cultivate good financial habits. In this case, tracking their monthly family budget and inculcating a habit of saving before spending were their immediate priorities.

Trust me when I say that financial planning is a long journey. We help clients understand their current financial situation and plan for their financial future. But as circumstances change over the years, we also need to accompany them as they make major financial decisions in their life, and keep them updated on the latest happenings along the way.

Although Andy and Amy are still striving to be more financially stable after their first year of engagement with our service, their progress have been remarkable as their finances are now more organised. They were able to address their immediate gaps and started adopting good financial habits. These new habits will help them form a strong and healthy foundation as they work towards their goal of achieving financial freedom.