Graham Wells, Financial Coach & Chartered Financial Planner at GroWiser Financial Coaching, explains how he was able to guide a client through using the tenets of financial wellbeing, with positive and far-reaching results.
Douglas suddenly came into a bit of money for the first time. A modest inheritance created something of a quandary because, having never invested before, he really didnât know where to begin.
Internet searches threw up options like peer-to-peer lending, which sounded exciting. But to be on the safe side, Douglas felt that a little bit of guidance might be sensible before jumping into a decision.
The next 18 months took him on a transformational journey, with financial wellbeing at the core. Questions no longer focused on where to invest money, but how to maximise the return on life.
Gaining control of day-to-day finances
âSavingsâ, âinvestmentsâ and âbudgetingâ werenât part of Douglasâs vocabulary. Having reached his 40s with a successful career in events management, he had a workplace pension, but no other assets aside from his lovely, mortgaged townhouse, which he shared with his partner.
In fact, Douglas had never saved money. Every penny earned had always been spent. So this inheritance created a first-time dilemma of where to put spare cash.
The first step was to clear some unsecured debts and stabilise spending patterns, to ensure the inheritance didnât simply dwindle away over the next few years.
In a way, the timing was fortunate. Covid-19 had put paid to the usual fast-paced social life and created a quiet period to take stock.
Simply understanding the amount of money that was âwastedâ previously came as a shock. Lockdown lifestyle changes were made permanent, and thoughts began to turn towards the future.
A clear path to identifiable objectives
Some careful questioning using financial wellbeing tenets helped Douglas to envisage life in his 60s. He had no great desire to retire early because he found his work enjoyable and rewarding. However, our conversation uncovered that a workplace scheme that coincided with state retirement age at 67 or 68 felt a little too far away for him.
Douglas wanted to feel freedom. He loved the idea of travelling, listening to and playing music. The idea of exploring Europe in a motorhome came up and was clearly exciting. The option to do this at 60 appealed much more than waiting until almost 70.
As we spoke it was evident that deeply held but unexplored dreams were beginning to enter conscious thought.
Before long, Douglas had made the decision to make significant additional voluntary contributions to his pension. And for the first time, he felt he understood enough about ISAs and options to begin self-investing with modest, monthly contributions.
The ability to cope with financial shocks
Thanks to the inheritance, Douglas found he enjoyed the peace of mind in having cash available for the unexpected. Studies show that having money set aside for emergencies can provide a higher degree of wellbeing than a pay rise. Douglas appreciated this now and established an emergency fund.
Having opened up to the bigger picture, the benefits of life insurance became clear. Douglas arranged life insurance to protect his mortgage payments. This complimented Death in Service benefits from work, which he now understood and appreciated.
Financial options in life
With the basics in place, things really started to get interesting. After about a year of building financial knowledge and awareness, Douglasâ path to the future grew clearer.
With security measures in place for financial shocks, his confidence bloomed, prompting a decision.
When we met for his latest quarterly coaching and mentoring session, Douglas announced that heâd set up a new saving fund. He called it his Music Fund.
Outside work, Douglas was a skilled musician with dreams of producing and recording his own albums. He explained how, nowadays, it was possible to produce music much more easily by hiring or buying the right equipment and software. Inspired by friends who had already succeeded in this area, he was on a path to create the financial option of producing and publishing music.
He said to me, âThe old Douglas would have sat and dreamed about that. It might never have happened.â
I asked how it felt making that decision.
âIncredibleâ he said. âI started to really visualise how it would look. I started to take it so much further. It made me finish songs that were half-written. I started to get really cracking, itâs opened up so much optimism. I donât spend on booze or pizza. Money is much more precious to me now.â
He added that previously âI wouldnât have had the confidence to save money and not spend it. I didnât respect money.â
Often, itâs not the lack of earnings that prevents financial options in life. It comes down to a lack of confidence or an unhealthy relationship with money. Coaching helped Douglas identify his weaknesses and strengths, and visualise a meaningful future with confidence.
Clarity and security for those we leave behind
With his own financial planning well underway, the fifth element of financial wellbeing naturally entered into discussion. Thinking beyond his own lifetime, Douglas minimised uncertainly for friends and family by getting a will into place.
Powers of Attorney even entered into our discussions, again focused on the benefits of wellbeing this could provide now and in the future
Lessons learned
Financial wellbeing building blocks transformed the financial trajectory and behaviours of Douglas. The impact on his wellbeing was more than financial â it had a positive impact on his career, social and physical wellbeing too.
Financial coaching and planning based upon the five elements of financial wellbeing can be truly empowering and transformational. And in this particular case, without the need for any product recommendations.
Photo by Matt Botsford on Unsplash.
