Glass of something served with a crisis?
Maybe it is just me, but it’s all been a bit frantic for the last decade and if you stop to take a look at what’s been achieved, it can be a bit scary! Some folks don’t have the luxury of stopping to take a step back, others don’t want to and still more simply sort of get there because it just doesn’t feel right for them.
Some are delighted with what they have achieved (hooray!), but still taking time out to plot how you got where you are and where you want to go is worthwhile.
The life pitch
In a way, where you might be at in life right now is like a ‘time-out’ and break during the match that is life. Student loan repaid, but replaced with mortgage costs as an example. You might be ahead on your score for the first half, but you’ve probably got at least another 20+ years of working life ahead of you (sorry to remind you) and when you come back on to ‘the life pitch’ after a segment of orange and a talking to by the coach, you’ve got to make it happen in the second half, otherwise your final score may not look as you want.
The first bit of money guidance to give you is…don’t panic! Returns usually require two things; money, of course, but more importantly time, and at least you’ve got some of that! Our next free guide is entitled ‘The push to be better’ and most want to be - however, knowing where you want to be usually means that you know where you have come from and that’s the point of this free guide. This is because the life events you’re likely to have experienced at this age may have happened as part of a natural process. Planned for sure, but still part of ‘growing up’, if you like. Now is the time to point what you’ve got in the direction you want to go. It’s a bit like the triangle of human needs, just specific to you!
So, what to look at?
Make sure your money is going where you want it to, and not where it shouldn’t
Are you paying over the odds for your energy bills? Is your mobile phone contract up for a thorough review? Mortgage costs and terms reviewed recently taking into account the current economic factors? Are you saving into a pension and making sure that you have enough cash on hand for an unforeseen crisis? A combination of reviewing your outgoings and using the savings you make to build up funds for the future can be pretty effective over the longer term. Have a look at some of the comparison and utility switching sites online; you can compare everything from energy providers to car insurance to savings accounts.
Start with your bank statement to see what’s coming in and going out. Not the most riveting of reads, we appreciate, but important none the less!
Where do you want to settle, if at all?
Why do you live where you do? By choice, just happened, moved for work or for a partner? And at this point, is this still your location choice? Now is a good time to think about where you may want to settle over the longer term – if this is your goal. Many people find that where they live is dictated by where they work, where the children go to school, where parents live and so on…but if you’re not at that stage yet, you might want to use this period of relative freedom to make some longer-term decisions about settling down (or not!). Which leads on to our next point – housing.
Do you want to move? And if you do, where to, what cost, why and what’s your timescale? How much do you want to spend and how are you going to finance the house purchase? It’s likely that you’ll be borrowing money to buy, so do your research either directly or with a mortgage professional to see what can be achieved. It is important to make sure that the deal you sign up for is right for you at the outset, and keep this reviewed on a regular basis – after all, you and your mortgage will be together for many years to come.
Don’t forget the ancillary costs of moving if you are buying, such as building surveys, Stamp Duty and agents’ fees (+VAT).
Will your family (all generations) guide you?
This is the point in life where you might just start to get wind of the fact that you might not have complete control over your life and your finances. Childcare costs might be rising, and parents aren’t getting any younger. Will they be supporting you...or the other way around? It can be a testing and stressful period if you’re trying to juggle work, young children and ageing parents and you may find that you are just keeping your head above water and taking things a day at a time. We realise that budgeting and forward money planning are probably the last things on your mind right now, but getting your head around what’s coming in and what’s going out can really help to give you a bit of that control back and make things seem more manageable. Plus, if it’s a topic you can raise with the wider family, is there any financial help available from parents or grandparents, as an example? There are some tax-efficient ways to gift money and if funds are available these could be worth exploring, perhaps if the Bank of Mum & Dad is still open?
Where, when and at what cost, if any? Big decisions for any parent, although some of these questions have probably already been answered for you, depending on the age of your children, where you live and whether you want to pay for their education. You might already have moved to be near a good school and if not, it’s probably on your mind – check the catchment areas carefully before making any final decisions. If you’re thinking about going down the route of private education, make sure that this is something that you (and/or other family members) can afford over the longer term. It is a significant ongoing financial commitment, with fees that can run into tens of thousands a year in some cases, not to mention all the extras such as uniform and trips…and future university costs.
Finally, if you think about all aspects of your financial position, what is the sore point that possibly keeps you awake at night? You know the one (and I don’t mean the answer that none of us has enough cash!). An outstanding loan, helping the family, holiday costs…the list can be endless, but I hope yours is not. If you do nothing else, solve that one issue. Budget for it now, set a time to get it settled and stick to this new plan.
So, when you get a chance (we know you’re busy), pour yourself a glass of something, take a seat, bring a note pad and take stock of where you are, where you want to be, and what distance you need to travel. Financial planning is an evolving journey, you just need to focus on the destination you want to reach. Now to push forward... no crisis required!
We hope you have been inspired to take action for your financial planning from the notes above. This SaidSo free guide is for guidance only.