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Creating a financial plan might seem like something you say you'll do when 'I'm older.' However, I'm sure there will be many forty-somethings wishing someone had advised them to invest just £20 a month since their 20s. They could be sitting on a nice little nest egg now. But that doesn't always seem achievable. "No one does it as we’re caught up in being young and maybe living hand to mouth," says Independent Financial Advisor, Kasie Della-Rumball. The good news is that it's not too late to start, whatever your age. A solid financial plan can help you build wealth and future security.

Here she shares how to start creating a financial plan from scratch, creating financial freedom, investing, and managing debt.

The importance of financial planning

But do you really need a financial plan, and why should we make it a priority?

If you can't rely on great windfalls, inheritance, winning the lottery, or a huge pension fund, having a financial plan in place is a safety net for when you can't work or for later in life when you want to retire, or as Kasie describes: "It’s your get out of jail free card for things that will happen in the future."

If you're self-employed and ever need to take time off or if you just want to feel secure about your future, knowing you have a plan can be a big comfort.

"In modern society, we’re so overwhelmed with everything we’ve got to do that sometimes financial planning falls by the wayside. The safety nets that used to come with having salaried jobs: final salary pensions, all the planning that used to be put in place by the government or by your company to help you in the future, has in many cases, disappeared – and it’s probably going to get worse, not better," warns Kasie.

What does a financial plan entail?

"Financial planning can encompass a whole range of things. People do naturally  associate it with investing, and products are a part of it. But it’s taking you as an individual or as a family and trying to ensure that what you want to achieve and happen in the medium to longterm, we’re putting in place for you," Kasie explains. 

"It’s not something that’s done once… As we know, things can change quickly. Your relationship with your financial planner is organic. What we’re here to do is adjust the programme every time things adjust in your life… Things have to be fit for purpose at every stage of your life and if you have a good financial planner and one you communicate with, that’s exactly what should happen."

For some people, the idea of financial plan is daunting. There is a lot of jargon, which can lead to a fear that they may not understand what they're being told. Financial illiteracy is not uncommon. We are rarely taught about budgeting, taxes, and personal finance management in school. Yet, having a basic knowledge of finance is a ticket to making better decisions for your future. There is also a fear of getting honest about their financial situation. 

Whatever state your finances are currently in, there is reassurance and a sense of freedom in understanding and making a plan.

What is Financial Freedom?

You might hear the phrase financial freedom a lot. According to Kasie, there are two components. 

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