Cashflow modelling software is an incredibly valuable tool that financial planners can use to help you see how your finances might look in the future.
Financial planning is designed to help you reach your lifegoals. So, being able to visualise how your finances may be influenced by changes in your circumstances or in the economy over certain time frames could be hugely beneficial.
See a forecast of your financial future
By presenting a visual illustration of what you might be able to expect, cashflow software could help you determine if you’re on track to achieve your financial goals.
Since life is unpredictable, gaining a glimpse into your financial future could allow you the opportunity to prepare for whatever life might throw your way.
Find out if you’re on target to meet your financial goals
Your financial planner can use the software to help you answer some of life's big financial questions, such as:
- Will I have enough money to retire when I want to?
- Can I afford to help my children with a deposit to buy a property?
- Am I going to run out of money in later life?
- Will my family be financially secure if I go into care or die unexpectedly?
- Will my family have to pay Inheritance Tax on my estate?
To help answer your questions, we input variables such as your current income, assets, and expenses, together with how much you're saving now. Then, the software layers in financial variables such as investment performance, inflation, and your projected future earnings.
Once the software has been given all the relevant information, it can present a complete overview of your current financial situation and how that might change – for better or worse – in the years ahead.
Help you prepare for major milestones and unexpected challenges
Being able to see ahead to how your finances would fare if something unforeseen happened to you or your family can be hugely helpful.
Being able to see any weaknesses in your financial plan through cashflow planning could give you valuable time to take appropriate steps to correct any shortfalls or put suitable protection in place to help you and your family cope should the worst happen.
It’s also possible to alter the information provided, allowing you to understand how different future scenarios might affect your finances.
For instance, you can see how changing the date of your retirement might alter your plans, adjust the level of return on your investments, or simulate a fall in the market. Likewise, if you’re planning a big cash outlay at some point in the future, it can help you to see how a significant spend might affect your overall plan.
You can also learn how taking income from different sources could influence your finances – and your tax situation – over time.
As you might imagine, being able to access this level of detailed information could help you make informed financial decisions with confidence, rather than guessing everything will be fine, which could lead you to make false assumptions.
Benefit from clever technology coupled with professional expertise
It's important to note that a cashflow forecast is exactly that – a forecast of what might happen. It can't provide certain guarantees of what your future financial position will look like.
As such, cashflow modelling is not a replacement for bespoke financial planning – it's simply an incredibly useful tool we can use to help you make informed decisions based on data, rather than assumptions and hope.
With a professional financial planner by your side, this type of smart software can help you enjoy the benefits of human knowledge and experience coupled with cutting-edge technology.
Using the information garnered from your financial forecast can help us to create a financial plan that incorporates multiple future possibilities. It can also help to answer many of your questions – both at the outset and at regular intervals when we meet to review your plan.
Get in touch
To find out more about how we use financial planning software to help you plan for a financially secure future, please get in touch.
Email enquiries@alexanderpeter.com or give us a call on +44 1689 493455.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority do not regulate cashflow planning.
