How to plan for your future Work Life Balance

How to plan for your future Work Life Balance

How to plan for your future Work Life Balance

By Chris De Luca

This is the process I go through with clients but how useful it will be is directly correlated to the time and effort they/you are prepared to invest in, what could be, a 20 year plus plan.

  1. With core objectives and values ascertained together with timeframes, the next step is to establish your current income requirements and what reserves you need for foreseen calls on capital and unforeseen emergencies.
  2. I recommend that you break this down into:Bills – e.g. utilities, council tax, insurancesNecessities – food and drink, clothing, transport/cars, entertainment, holidays, saving for retirementLuxuries – food and drink, going out, status symbol cars, bigger holidays, more entertainment and the ‘bucket list’.
  3. The debate between couples as to what is a luxury and what is a necessity is always fun to watch (!) but people really have to distinguish between a need and a want, for example:a) While we all need to eat, how often do we need to go out for a meal, or order a takeaway rather than cook?
    b) How often do we need to holiday abroad and where? (see RPI blog)
    c) While a car is a necessity for most of us, does it have to be a top of the range model from a high quality marque?
  4. Teresa May did resonate with the public when she talked about the JAMS – people who are ‘just about making it’ – for me it’s important to understand why they are JAMs, what lifestyle choices have or are being made. This often colours what advice that I can give.
  5. I am not saying not to have these luxuries; it is to just recognise that is what they are and what the implications could be.
  6. Compare the figures produced with your income(s):a) If outgoings exceed income then you need to find savings by cutting back on luxuries, if not immediately, then as soon as possible.b) If they match, still look at what you can cut, at least temporarily, because it is also highly likely that you won’t have at least 3 months’ worth of outgoings held as an emergency reserve!c) If income exceeds outgoings by 10% or less your priority should be to build your capital reserve again, if that means you temporarily have to give up a luxury, then it will be a small price to pay for peace of mind.

    d) If income comfortably exceeds outgoings then you probably have the reserve established already, so well done, but there is still no harm to see if these luxuries are, in fact, still value for money!

  7. I categorise ‘saving for retirement’ as a necessity, and it is, if you want to ensure a comfortable lifestyle in retirement. For those of you in category d) above, the sooner you build up your target retirement fund, the sooner you can get to the point where you can choose to retire or not – it is a brilliant place to be! Works becomes so much more fun then and you really have achieved the ideal, sustainable WLB.

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