Money & You - Financial planning (Part 1)

Financial Planning - How to get ahead in 2025

It appears we're prioritising our immediate needs over our future security, showing even though we know what needs to be done, it doesn't mean we know how to make it work in our current circumstances.

A simple, clear, applicable approach to personal financial planning can make everything feel less daunting!

Whatever our current financial situation, developing a healthy money mindset can help us to create a practical saving framework that will build long-term financial security.

Quantum's December #moneytalks conversations are focused on Financial Planning for 2025:

• Understanding your money mindset
• Creating a saving framework
• How to maximise your savings potential; and
• How to build long-term financial security

Here we offer some proven strategies that turn saving money into an automatic habit instead of a monthly struggle, all great-to-have conversations to put on that holiday to-do list for planning your 2025.

Understanding your money mindset

Financial planning involves more than just numbers - our relationship with money goes much deeper. Money can cause more stress in relationships and marriages than any other factor. This stress affects our mental health and daily decisions.

Identifying emotional barriers to saving

The reality is stark - 70% of Kiwis are experiencing money-related stress. Several emotional barriers affect our personal financial planning:

• Fear of the future and financial instability
• Anxiety about making financial decisions
• Guild about prioritising saving over immediate desires
• Shame about past financial mistakes

Breaking negative financial habits

Our brain naturally prefers instant gratification over delayed rewards. This explains why immediate purchases often win over long-term saving goals. A new phone or outfit brings temporary satisfaction, and creates a cycle of continuous spending to maintain that emotional high.

Building a positive relationship with money

Money management requires a change from seeing saving as a sacrifice, to viewing it as an investment in our future, so we can focus on feeling satisfied and proud as our savings grow each month!

Little changes like:

• Setting meaningful goals that match our values
• Using anticipatory happiness as we save for future expenditures
• Celebrating small wins during our saving process
• Automating our savings to remove emotional decision-making

Believing spending leads to happiness sets us up for disappointment. Understanding our emotional connection to money helps create a more comprehensive approach to financial planning.

Creating your saving framework

Setting percentage-based saving targets

The first step divides our income into three main buckets:

• 50% for needs
• 30% for wants, and
• 20% for savings and financial goals

We can adjust these percentages based on our circumstances - some people might prefer 70-20-10 or 80-15-5 splits. Finding a split that works for our unique situation matters most!

Establishing multiple saving categories

Our saving strategy works better when we create dedicated accounts for specific goals. Saving categories are built around your budgeting needs, but here's a few ideas for what you could include:

• Oh Shit emergency fund (3-6 months of expenses)
• Short-term savings (holidays, special events)
• Long-term goals (home deposit, retirement)
• Medical & Dental expenses
• Takeaways or Uber Eats
• Clothes and Shoes

Multiple savings accounts make tracking progress toward each goal easier! And, remove the juggle guilt! If the money you’ve budgeted is in the account, its for that purpose.

Implementing automated saving systems

Automation stands as the cornerstone of consistent saving. This setup process works well:

1. Link savings accounts to our primary account
2. Set up automatic transfers after each payday
3. Establish alerts for when balances dip below set levels
4. Automate bill payments to avoid late fees

Automating our savings removes the EMOTION from our financial decisions.

This "set and forget" approach will give a consistent path to financial security without conscious decisions each payday. We also retain the flexibility to adjust our saving framework as circumstances change. Regularly reviewing our account structure helps our financial goals stay on track effectively.

Your positive money choices today move you closer to long-term goals - whether building emergency savings, planning for retirement, or growing wealth through investments.

Your success depends on commitment to the financial plan and ability to adapt when needed. Even modest savings started today can build substantial financial security for tomorrow.

Read on in Part 2

• Maximising your saving potential; and
• Building long-term financial security