What is Cashflow Planning?
We see the creation of a lifetime cash flow forecast, as the foundation of any financial planning exercise. It provides a series of forecasts, taking in to account a variety of “what if” scenarios, that is intended to allow our clients to know if they have made enough provision already or need to take further steps towards meeting their financial goals.
How does it work?
We capture a full breakdown of your current and planned income and expenditure, as well as assets, liabilities and any other sources of future income such as state pensions, equity release or inheritance.
We take account of inflation and expected investment or cash returns to produce a forecast of our client’s likely long term financial picture.
We say “likely” as the forecasts can only be based on a set of assumptions that feel correct at the time. For that reason, we strongly recommend that our clients revisit the exercise on a regular basis in order to take account of changing circumstances.
Why is Cash Flow forecasting important?
Cash flow forecasting is not perfect by any means. However, we find that our clients who have gone through this exercise find a greater sense of confidence in what their future looks like and, where they need to make further provision, they have a clearer picture about what is required.