Visualise Your Financial Freedom Roadmap with ‘Cashflow Modelling’

Cashflow Modelling is a powerful financial planning tool that combines your income, assets, and current and future spending to show whether you are on track to meet your goals. It creates a clear visual projection of your finances, helping you see how your plans could unfold and where you might need to adjust.

It can answer key questions such as whether you can afford private school fees, whether you’ll have enough to buy a holiday property, and when you could achieve financial freedom and step back from work on your own terms. With this insight, you can plan confidently and make informed decisions about your future.

How does it work?

Defining your goals

The first stage of the Cashflow Modelling process is to establish your goals and to define a cost for each of these.

To demonstrate how the process works we'll use an illustrative case study. In this worked example 'Tim' is a British expat living and working in Switzerland. He is 47 years old and is a single parent to 'Amy' his 13 year old daughter, who is financially dependent on him.

• Tim wants to secure his 'financial freedom' and have the option to step back from work by the age of 67 [at the very latest].
• He plans to move to France at the age of 60 and ultimately retire there, taking his Swiss Pension with him.
• His current outgoings are £56,000 p.a. and he thinks that he will need to support this level of annual expenditure until he is 70. At this age he believes that his outgoings will reduce to approximately two-thirds of that [£33,200 p.a.]
• He would like to pay off the mortgage on his main residence by the time he is 55 (and is on track to achieve this on the basis of his current repayments).
• He has a buy-to-let-property and plans to sell this when he is 75 to help fund his retirement.
• He expects the financial support for his daughter Amy to cost £500 per month until she goes to university. She plans to study a four year Bachelor of Arts (BA Hons.) course at a Scottish university.
• He will also support her with her UK university fees and rent for her student accommodation. He expects the total cost of this to be £15,000 p.a.
• He would also like to help Amy pay for her wedding if she chooses to get married, and he estimates that this could cost around £30,000. He estimates that he will need these funds to be available by the time he is 60 to address this expense.

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Having established these goals and timescales, the key events can then be put into a visual timeline.

What is your income and expenditure?

Having considered key goals and events [as shown above] and estimated the specific expenditure and income associated with each of these, the next step is to factor in ongoing regular income and regular outgoings.

When considering outgoings, periodic spending such as holidays and new car purchases are also included to reflect projected annual expenditure as accurately as possible. Contributions to and potential withdrawals from investments and pensions are also considered.

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Based on the anticipated spending and income, we can create a projection to check that the outgoings will be sustainable.

In the above example, you can see that Tim's spending [shown as the thick black line] goes up when Amy goes to university (and comes back down when she graduates) then spikes in the year that he has projected she may get married. The dotted line shows his spending including the contributions that he is making to his savings and investments.

The coloured bars in the chart represent Tim's income. In this example his income from work [shown in red], his rental income from his buy-to-let property [shown in blue], and his pension income [shown in green], covers his estimated spending, with a surplus left over. You'll note that there is additional income in the years that include events such as the sale of his buy-to-let property at age 75 [shown in purple].

After Tim stops working, his outgoings will be covered by a combination of income from the assets that he has built up throughout his lifetime and his UK and Swiss pensions which he will transfer into a single portable international pension. It is therefore important to also map these assets in the model.

What assets do you have?

In our example, Tim has the following assets that he can access at the start of the projection:

Tim is making contributions of £500 per month to his investments and he contributes 4% of his salary to his workplace pension, which his employer matches.

Based on projected income and spending, investment contributions and growth, we can project the evolving position over time.

In Tim’s case he is building up assets throughout his lifetime in his pension [shown in green above], his current account [shown in blue], his savings account [shown in red] and investments [shown in yellow]. Based on the projections we can determine that Tim is on track to achieve his goals and have a significant surplus at the age of 95.

When we are creating a projection, we will always base the initial values on your current finances, to reflect how they are currently structured, before considering making changes as part of your financial planning proposals, and working through these alternative projections accordingly.

In the introduction, I identified some of the key questions that are often asked. One of the most important is “When will I achieve financial freedom and have the option to step back from work on my own terms?”

If we use Tim as an example, we can look at whether he will have secured his financial freedom [and can effectively therefore afford to retire] at the age of 60 rather than 67.

If all other details remain the same, Tim’s projection looks like this if he retires at age 60:

You can see from this projection that if Tim retires at age 60 he will have a funding shortfall from age 91.

Identifying this shortfall at age 47 gives him time to consider the options available to him with his financial planner and, if he is still keen to pursue the idea of securing his financial freedom by the age of 60 agree upon a strategy to address this shortfall.

• This communication is for information purposes only and does not constitute financial, legal, or tax advice.

• All content is based on current UK legislation and is subject to change. All planning arrangements should be regularly reviewed in consideration of legislative updates.

• Pension regulation and tax treatment vary between jurisdictions. Any reference to UK or international pension rules is portrayed in general terms and is not intended to reflect individual circumstances. Any examples provided are hypothetical and for illustrative purpose only. Outcomes will differ based on individual circumstances and local law and regulation.

• Pension transfers carry specific risks and may not be appropriate for everyone. The suitability of any transfers or investments should be assessed on an individual basis.

• Past performance is not a reliable indicator of future results. The value of investments can fall and rise, and you may not get back the amount originally invested.

 Last updated 19 August 2025