A Chevrolet Spark will get you to the same place that a BMW will take you. *Bermuda Sun file photo
A Chevrolet Spark will get you to the same place that a BMW will take you. *Bermuda Sun file photo

Most of us work hard for the money we make and want to make sure that ultimately our money will work for us. We are preparing now for the future and at the same time covering the unexpected costs along the way.  

Most of the time we do well on our own but at some point we will welcome the services of a financial planner who will provide insight as to our financial position as well as help to identify any shortfalls.    

Analyzing a personal financial plan usually uncovers financial gaps and weaknesses, which can range from being underinsured to overspending.   Making the changes necessary to fix these gaps can be very challenging.

There are three main steps to closing financial gaps:

  • Determining financial planning needs.
  • Adjusting budgets to increase cash flow and using the additional cash to cover the gaps.
  • Making sacrifices today for a better tomorrow.

Determining financial planning needs

Assess your current financial situation to find the strengths and weaknesses within it. 

When I evaluate a financial plan my goal is to get a client from where they are today to where they want to be, also being mindful of protecting assets from risks. 

You need to determine what your goals are and if you can accomplish your goals and objectives while maintaining your current financial plan. 

If you find that your goals don’t fit into your current financial picture, you have two choices: change your goals to better align with your current finances or change your spending habits to increase savings to better align with your goals.

Adjusting budgets 

Once the financial planning gaps have been discovered, it is time to determine how you can fund these needs. Closing financial gaps involves the requirement to save more and invest the money, or perhaps purchase additional insurance. 

The difficulty comes when determining where this additional cash is going to come from; it is easier to control expenses than income. 

Finding the cash needed to fund these goals is usually a matter of reducing current discretionary spending. 

Making sacrifices today for a better tomorrow

The hardest part about reviewing your financial gaps and determining the areas for improvement is the realization of having to reduce your discretionary spending to cover those shortfalls. 

You work hard for the money you make and you want to enjoy it. We must retrain our brains to think about securing our tomorrows and not be so focused on the pleasures of today.   No one really cares about what car you drive.   

A Chevrolet Spark will get you to the same place that a BMW will take you.    

Once the financial planning review is complete, the final step is to implement the changes that have been identified.   You will have learned what the financial gaps are and what you need to do to close those gaps. 

Financial independence is the goal we should all be striving for where the money is working for us and we are no longer working for the money.

Carla Seely is a Senior Wealth Manager at AFL Investments.  She may be reached at 294-5712 or cseely@aflinvestments.bm