Section outline

  • Future Planning

    • The importance of future planning

      So, why should we care about future planning? Well, it’s all about setting ourselves up for success down the road. Think of it as creating a roadmap for where you want to be financially in the next few years.

      Why is future planning important?

      Financial Security:

      Planning ahead means you’ll have savings and investments to fall back on when life throws you a curveball. No more stressing about unexpected expenses!

      Achieving Goals

      Whether it’s buying your dream house, starting a business, or retiring early, future planning helps you set clear goals and figure out how to reach them.

      Peace of Mind

      Knowing you have a plan can seriously reduce stress. You can focus on enjoying life, knowing your finances are under control.

      Uses of Future Planning:

      Budgeting:

      Creating a budget that aligns with your long-term goals helps you manage your money better and avoid splurging on things you don’t need.

      Investing

      Future planning involves understanding different investment options and picking the ones that match your goals and risk tolerance. It’s all about growing your wealth over time.

      Retirement Planning

      It’s never too early to start thinking about retirement. Future planning includes setting up retirement accounts and figuring out how much you’ll need to live comfortably when you retire.

      Debt Management

      Managing your debt wisely is a big part of future planning. This means paying off high-interest debts and avoiding taking on new ones unless absolutely necessary.

      In a nutshell, future planning is a key part of financial literacy that helps you take control of your financial future. By setting goals, creating strategies, and sticking to your plan, you can build a secure and prosperous future.

    • Identifying long-term personal goals

      Money personalities

      Now you've gained an understanding of why future planning is important and its uses, it's important to consider which money personality you are. 

      Life after graduation

       

      Personal goals

      Consider your long term personal goals using the activity below. Select the goals which you'd like to work towards and think about how you would plan these into your future. 

    • Financial Strategies

       

      Saving vs Investing

      Once you’ve identified your long-term financial goals, you can begin to explore the best strategies for your personal situation to make them a reality. Though saving and investing are often used interchangeably, some key differences can make certain options better for your situation.

      Saving Investing
      Money is usually stored in bank accounts Money usually grown in assets
      Easy access to money Usually requires sale of asset to access money
      Easy access to money High risk
      Low return High potential return
      Can be more beneficial for short-term goals Can be more beneficial for long-term goals

      Debt management

      The word “debt” usually comes with negative connotations; however, this can sometimes be positive depending on the context. 

      Good debt refers to money borrowed to achieve goals, for example mortgages and educational loans can be considered investments in your future.

      Bad debt refers to borrowing money to purchase items that lose value. ​For example credit cards or payday loans being used for new electronics or clothing.

      The following strategies focus on debt repayment on top of the minimum payment threshold, using any additional funds that you may have available.

      High Rate Method​

      This is the mathematically optimal solution, where you focus on the “highest cost debt” first, and can be the fastest way to become debt-free.

      Snowball Method​

      This is NOT the mathematically optimal solution, but can feel like the best option psychologically, by focusing on removing one debt completely before jumping into the next.

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      Financial advise

      There will probably be times in your life when you're not sure what to do with your money or what decisions you need to make about your financial future. There are thousands of different financial products on offer and choosing between them can be difficult.​

      If you have little experience of dealing with finances or you're confused about making a decision, it may be helpful to get professional financial advice.​

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      A financial adviser can help with things like:​

      • planning for your retirement​

      • investing or saving money​

      • making the most of a lump sum of money such as inheritance​

      • buying a property or taking out a mortgage​

      • when your life changes for example, you're starting a family