Lessons from a Financial Planner

Many of us want to achieve financial freedom but do not know where, or how to start. This week, I had the privilege of listening to a financial planner and the pearls of wisdom that were dished out are invaluable- too good to keep to myself so I thought I'd share them with you.

Know your numbers

It is important to know how much money comes into your account and how much you spend. This is slightly different from a budget. It is in fact the place to start before you can set yourself a budget. There are a few numbers to consider but I would recommend that you at least know how much you get paid in a month and how much you spend on different items. Using an expenses tracker can help you keep track of how much of your money goes on what. I sat down with my husband to do this last week.

We set out time periodically to do this- at least once every quarter. It is always interesting when we identify payments that have been leaving our accounts unnoticed. This is usually because we subscribed to something a few months ago, and forgot to stop the subscription when we no longer use or need the resource. If you, like me, have in the past, have put in your bak details for a subscription which if often free for the firs few months, remember to set yourself a reminder to cancel the subscription before the set date for money to leave your account.

Set a Budget

This is the natural next step to tracking your expenses. Have you noticed how the prices of food, goods, and services seem to be on the rise recently? I went shopping over the weekend and I could not believe the prices! Hang on, it's not just goods and services, our taxes will also be going up soon. This all means stretch to our pockets. Are you ready for it?

Budgeting and being disciplined with how much you spend on what will help manage the uncertainties that we face in these troubled economic times. Remember that budgeting is a skill that has to be kept alive. You may not be great at it to start with, but just keep trying and you will find that you get better at it.

Write a Will

What's the point in saving, investing and making financial plans if it all goes to the government's purses when we die. Death is not something one wants to think about, especially when you're young and hustling. Many people put off writing a will for so many reasons- you might be single, feel young, busy, not know where to start, and the list goes on. The truth is that if you have people who depend on you such as children, a spouse, or elderly parents, a wise thing to do is to write a will. This is a legal binding document that determines what happens to your estate if you die unexpectedly. Some people think they don't need a will because they don't have much money but it does not matter how rich or poor you feel. What matters is that you write down how you want the things and the people you care most about to be cared for when you're no longer here. For example, if you have small children, who would you like to look after them? You want to ensure that the things and people you care about will be well cared for if the inevitable happens.

Get life insurance

We insure our cars, homes and pets but often forget the most important thing- insure yourself! Why not consider getting life insurance if you don't have one already? Life insurance, like a will is important if you have a spouse, partner or children who are dependant on you. You are much more likely to get cheaper premiums the younger you are and without much health issues. However, if you leave it until you're older, your life insurance premium is more likely to increase. Nevertheless, get a life insurance plan while you're able to.

Get Critical illness Cover

This doesn't mean you're praying for ill health. We all hope to live happy, healthy lives but is also advisable to get a critical illness cover in the event of loss of employment or inability to work due to a critical illness. This is useful because it can support your expenses

Pay into a pension

Pay into a workplace pension. You get extra income from this because your workplace tops it up for you. If you've worked for different companies, consider consolidating your pensions into one pot so that it is manageable. If you own your own business, remember to set up you own private pension.

Write down a list of your assets

You may think that you don't have much, but it is important to make a list of the things you own and go a step further to write down their value. It might be portion of land in another country, your different bank accounts- regardless of how much is currently in it, pension pots, a painting in your home, jewellery, a house, and the list goes on. Remember that your assets are more likely to grow and change as the years go by so remember to set aside time to update your assets list. Such a list helps you keep track of what things belong to you. If things get really tough, you may look through your assets and identify what you could sell to turn to cash. If the ultimate happens- death, it means that your next of kin or children will know exactly what is yours and where to locate it.

Make a budget and stick to it

Plan to spend less than you earn each month. Making a budget is not easy, especially these days when the prices of goods and services keep going up. Nevertheless, budgeting helps you stay in control of your finances. Knowing what goes in and out of you account each month, and then setting a limit of what you can comfortably afford. You can use a budget planner to achieve this.

Speak to a financial adviser

Financial advisers have a wealth of knowledge and can help you identify what you need to think about to manage, protect and grow your wealth.

Conclusion

So, in conclusion, it's important to plan our financial future we all need to be intentional. This can be done in little small steps. You can do it! If you start today, you'll be well on your way to creating a stable financial future for yourself and your family. If you've enjoyed reading this, please sign up for more!