5 SIMPLE STEPS FOR PROVIDING EXTRA FINANCIAL SECURITY
We all strive for financial security. Just knowing you have enough money to cover your expenses, an emergency fund for those unexpected events and maybe a piggy bank, too, gives you peace of mind.
Here are Norwich Accountancy’s eight simple steps to improving your financial security and preparing for a rainy day.
1. Create a budget
Tracking your incomings and outgoings, and setting a budget for each week or month, is a good place to start. Once you know what comes in and goes out, you can work out where your money is being spent each month. From here, you can start to make some big changes or even tiny tweaks to help you save money for the future, or for a rainy day.
2. Pay off debt
If you have any debt, prioritise paying it off as quickly as possible. If you’re not sure where to start, there are a number of different debt repayment strategies available. Chat with a financial adviser to understand your options and get help finding the right approach for you and your circumstances.
3. Save for emergencies
Unexpected events happen, but if you have an emergency fund then dealing with them is easier and less stressful. Aim to have enough in your fund to cover your expenses for at least three, if not six, months plus a little extra. An emergency fund means you won’t have to borrow money should an unexpected event happen, saving you the interest on repayments.
4. Invest for the future
Grow your money by investing it for the future to help you reach your financial goals, like buying a house or early retirement. There are plenty of investment options depending on how much you have to invest, the level of risk you want to take and what you want to achieve. It’s a good idea to get sound financial advice before you invest any money.
5. Get professional help
If you’re struggling to improve your financial position, an experienced financial adviser can help you create a budget plan to pay off your debt, save for emergencies and invest for the future. They’ll also be able to help you understand your options and guide you in making the best decisions for your financial situation.
Other actions to consider include:
6. Live below your means
Aim to spend less than you earn. Perhaps cut back on takeaways or eat out less, cancel unnecessary subscriptions, switch utility providers or cut back on those nice-to-haves for a bit.
7. Make a financial plan
Once you have a budget, make a financial plan to include short and long-term goals. This will help keep you on track to reaching your financial goals and give you greater security. It’ll help you work out how much you have to spend on the things you need and what’s left to spend on the things you want.
8. Review your finances regularly
This will make sure your budget and financial plan are still right for you and keep you focused. This applies to any investments you’ve made, too. What was right for you a year ago may no longer be so, so review your finances regularly to make sure they suit you now.
Follow our five simple steps, and our bonus tips, to improve your financial security and get the peace of mind that you’re prepared for the future.
We’re here to help with a range of different aspects of personal tax and we’re adding new tips and advice all the time so take a look at our other personal tax articles or get in touch with the team.