Blog

Adult life is a cyclical process of juggling between the money you make and your expenses. And while it is quite possible to eventually gain a good balance for all these things, certain unexpected life events like car accidents, injuries, and sudden downturns and health can ruin your best-laid plans and systems. 

That’s why it is important to have good financial habits and plan your finances wisely, in order to prepare for unexpected events. Personal financial planning can go a long way to giving your comfort in the future, as well as preparation for unexpected events. 

And if you are unsure as to how you should go about personal financial planning, here are some helpful tips:

1. Have clearly-defined financial goals.

One of the first questions a financial adviser or planner is likely to ask you is what your goals are when it comes to your finances. It might be having a specific amount of money in your bank account by a certain time, or the capacity to live on interest after a certain period. It can even be the repayment of a debt over a period of time. 

In any case, it is important to have a concrete objective when it comes to your finances in order to have a good gauge of your financial health.

2. Manage and budget in advance. 

Without a budget, your monthly income is at risk of mismanagement. It is important to know how much you spend monthly on all the things you need—such as utilities, rent, groceries, and so on. 

Where possible assign a percentage of your income to savings, and then what isn’t spent on necessities can be spent on yourself. If you find that things are a little too tight, at least now you can have a better understanding of what things to cut back on to give you a bit more financial liquidity. 

3. Increase your financial understanding. 

With a financial plan, budget, and the help of a financial planner, you can gain a better understanding of your own finances. This increased understanding of your own finances can give you a great stepping off point towards more diverse financial strategies, like investments, and so on. 

4. Your emergency fund should be separate from your financial future fund if possible.

If your income and expenses allow it, it is important to set aside different funds for emergencies, and different funds for future financial plans. This reduces the risk of an emergency leaving you in a financial pitfall, in addition to providing a healthy cushion that you can fall on in case something unpredictable occurs.

In the beginning, having a generalised savings fund is simple and easy to manage, but when thinking about the future, it might be better to diversify your planning so that you can be ready for both the positive and negative events.

Conclusion

Everyone knows that a stable future often costs compromises and sacrifices in the present. And while the idea of such compromises and sacrifices can be daunting, with these tips and the help of a financial adviser, the compromises you might have to make right now don’t have to hurt as much.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.  You may get back less than you invested.

If you need help with personal financial planning in Cardiff, send us at Harry Robinson Wealth Management a message. We’re happy to help!

*Will writing and Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James's Place and along with Trusts are not regulated by the Financial Conduct Authority.