Drawing Up A Long-Term Financial Plan

 

No matter whether you’re in your twenties, thirties or forties, it’s wise to plan ahead. Drawing up a long-term financial plan will help you save money now and lay down the foundations for a stable financial future.

The importance of budgeting

Budgeting is crucial for making financial plans. If you’re looking to boost your retirement fund, it’s incredibly beneficial to get into the habit of budgeting and saving now. Budgeting enables you to keep a close eye on how much you’re spending and set up a savings plan, which will help you clear debt and put money aside for emergencies, treats and your future. If you don’t already budget, it’s very easy to get started. You can use pen and paper, create spreadsheets or download an app. Using a series of different columns, write down your income, your regular outgoings and any additional expenses you’re covering in the coming month. Once you have these figures, you can calculate how much you have left over after paying all your bills and household costs. Use your budget to establish how much you can save each month and transfer a sum to your account on payday. This will help you hit a minimum savings goal. If you have a month where you earn more or spend less, you can add to your savings pot. 

Understanding pensions

If you’re employed, you may already be paying into a pension pot. If you’re self-employed, you might have set up a private pension. If you haven’t got a pension at work, or you’re not putting money into a pension, it’s a good idea to explore your options, to do some research and to find out more about which products are available and which will suit your needs best. If you have already got a private pension, and you were advised to move it into a self-invested private pension, you may be eligible for compensation. SIPP claims are designed for those who have been given bad advice and individuals who were mis-sold a pension. It’s important to understand your rights and to act if you feel like you’ve been let down or misled by an adviser. 

Prioritising debts

The majority of UK adults are in debt, but there are very different levels of debt. If you’ve taken out a mortgage, or you’re paying back a loan, for example, there’s nothing to worry about if you’re meeting payments and you’re on track. In fact, paying back loans and mortgages can improve your credit score. Debts become an issue when you can’t pay them back, they’re spiralling out of control and you’re accruing more debt due to interest payments and penalty charges. If you’re putting more and more money on your credit card, you can’t pay your bills, or you’re borrowing from multiple lenders, it’s vital to take action as quickly as possible. Prioritise your debts to reduce interest fees and prevent creditors pursuing you and seek expert advice. There are ways of taking control and getting out of debt. 

When it comes to managing money, it’s beneficial to have long-term plans. Hopefully, this guide will help you create an effective strategy to save now and in the future. 

*Photo source Pixabay


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