Financial planning made simple

Posted by Donna Hansen

ISAs, SIPPs, SSAS, VCT, EIS… It's enough to make your head spin. Judging by the amount of acronyms that financial services have, there's some justification of the view that the industry is awash with abbreviations and jargon. No wonder it's easy for people to view financial planning as over-complicated.

Financial planning tipsIt doesn’t have to be like this, so let’s strip away the unnecessary complications. Financial planning is about just that – planning.  Everyone is different and your financial plans should be designed for your own individual circumstances and requirements. The key to financial planning is to provide you with peace of mind and that could be security, whether it’s a specific security for your family, should the very worst happen and a breadwinner is taken out of the picture, or the general security of knowing that there is something to fall back on should plans not work out.

Financial planning is also about accumulating capital and securing it ready for use when you need it.  A large part of financial planning for many of us is about building up an amount of money so that we have the means to enjoy a comfortable retirement when the time comes to stop working.

So, how do you get to the stage with financial plans in place and a variety of eventualities covered along with a financial 'safety net'?  It's a process that is taken one step at a time and this helps to ensure that it's not an overwhelming task. There are many aspects of financial planning you can do yourself, along with some we'd recommend you take independent financial advice about.

Your first step is to get on track with your current finances.  Sit down with a budget plan and work out exactly how much comes in each month and how much goes out.  This sounds very simple, but as most of us now tend to pay for almost everything on a card, be it debit or credit, it can be difficult to keep a mental track of our spending.

As accurately as you can then, write down everything you spend and just for a month, try an experiment - withdraw a chunk of cash and try to live off that ONLY.  It might be old-fashioned but as road tests by some of Worldwide's staff show, it can really work.  Handing over notes and seeing the contents of your wallet depleted really does make you realise what you’ve spent.

After that, work out how much you pay each year on things like running your car, Christmas, household repairs, vets bills etc. then break it down into monthly amounts and put aside money for them. To make this easier, there are some banks which will allow you to have a “master” savings account and then you can name separate pots of money, a bit like saving in jam jars, but more secure! At the start of the month, put that away and then when the bills come in, you won’t be caught unprepared.

If after this you're still feeling daunted, there is plenty of help at hand. After getting to the point of feeling confident about your budgeting, consider taking some independent advice to see what else you could be doing to plan your finances for the future.

Arrange a meeting with an independent financial adviser who can help you with the budget planning, advise you on what you need to do to make sure you're secure and how best to get there.

Security and peace of mind are priceless. Often people worry about the cost of such a meeting but you will usually have a free initial consultation where the costs of any further advice you need will be explained fully to you and it's up to you to take it up or not.

If you would like to talk more about how we can help you, call Donna Hansen on 0800 0112825, e-mail or take a look at our website

The value of shares and investments can go down as well as up.
Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.


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