Hartlepool-born Harrison Smith is a financial adviser based in his hometown’s Greenbank business centre and is associated with Emerald Associates. Harrison offers an insight into money matters in an exclusive monthly column for North East Connected.
With summer holidays on the horizon, and the English football season reaching its climax, I thought I would link them both together. After all, one very experienced football manager’s famous quotes tied in nicely to my thoughts on finding the right balance to managing your finances. Enter Neil Warnock!
Neil has always had a different way of phrasing things to many other managers, well at least publicly, but as a huge fan of football I have had one of his rants stick with me for years.
Remember the infamous ‘Warnock’ documentary? (clips still available readily on YouTube for those wanting to watch).
When he blasts his Sheffield United players in the dressing room during the 2004-05 campaign in the Championship? “By all means enjoy it, but enjoy it by being (expletive) disciplined.”
His words sum up the rest of this column’s suggestions of being careful with your money perfectly. What the former Middlesbrough manager and one-time Hartlepool player blasted in the dressing room 20 or so years ago is what this is about in a nutshell.
What got me thinking along those lines is how, at this time of the year, many people are starting to go on holiday. I am not going to tell you to forget that summer holiday. We would all love one!
As well as having one eye on saving for the future, you also have to make sure you try to enjoy your life now. Therefore, structuring a financial plan in the right way, and think about the financial pyramid of what is important is crucial in allowing you to enjoy the now but also plan for your future self.
Life is all about balance. I’m not saying to save without enjoying the day, but you must make sure you do not cut your nose off to spite your face.
The perception of financial planning is that we, as an adviser, only want to put your money away for tomorrow’s goals. That is not true, although there must be a balance and it comes back to the pyramid.
As part of financial planning, you need to make an allowance for what you need to do now.
After all, if you have children, for example, they will not be young forever and those lovely memories are crucial.
The easiest way to achieve the holiday dreams, let’s say a trip to Disneyland, is about having foresight rather than dealing with the cost all at once then plan for that.
Holidays can often be a burden therefore rather than planning for it or putting money away, quite often there is an impulse decision to book up. That impulse can prove costly.
How often do people find themselves paying for a holiday on a credit card and still paying that off 18 months later? By which time you have probably added a second holiday to it or Christmas. That holiday, or two, might have suddenly become a 36-month liability.
Another good example these days is how a lot of people find it easier to purchase something for £500 spread over a few months rather than fork it out in one lump sum.
At least that could be interest free, but it would still be better to have had the foresight to pay for it in the first place.
Putting the money aside beforehand, or building up to something, is much easier to swallow than paying for it for months or years later when you have already been away.
Whatever plan you come up with, just make sure you try to leave yourself with enough money for your daily life too. We all know how hard it is these days and if you think of putting £300 into a long-term savings goal for retirement, have you considered what your short term spending needs are?
Financial planning is not all about tomorrow, just make sure, as Warnock once said, you are disciplined!
*For further information or to book an appointment with Harrison check out his adviser
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