Plant the seeds now for financial security in later life. What do you need to do?

When you begin considering a financial plan, the first thing to consider is your individual/joint needs and requirements, how these are likely to evolve and change through yours and your family’s lifetime.

A lifetime can be marked by a number of events, such as a job switch, starting a business, marriage, birth of children, buying a house, illness/deaths in the family, marriage of children. Financial planning should take into consideration the financial aspects to all these events.

Saving on a regular basis.

This can help reap significant benefits in future. An important aspect about saving is that, done properly, it will help ensure that you never get into a debt trap.

Budgeting is vital for managing cash flows.

Budgets detail the amount of money available or will get/earn over the lifetime of the Budget, how these funds will be spent, and how much would be saved. 

Accessing credit may allow you to live a certain quality of life instantly, it can adversely impact your financial stability. Accordingly, it’s best to learn to live within your means and incur avoidable expenses.

Get into the habit of regularly reviewing your financial situation.

This involves looking at your savings and investments and managing your budget. This will help keep your finances under control and allow you to make any necessary changes to your spending.

Spending impulsively can lead debt traps and cause you to miss your financial goals. If you already have debt, it makes sense to repay it.

You should have clear objectives of why you are saving money. They may be for the short term or long term.

Create an emergency fund.

This fund which would allow you and family to survive without income, for at least six months. This protects your savings and investments and protect you from having to rely on expensive debt.

Tax planning should be in line with your long-term financial goals. Plans which satisfy both wealth-creation and tax-saving are good vehicles in this regard.

You and your family members should be adequately insured. As you age, premiums tend to rise. So, it is important to buy insurance as early in life as possible.

Investing is a vital part of any financial plan. It is fine to commence with relatively modest contributions and increase them over time, as it becomes more affordable.

Treat saving and investing as a priority.

Often, people tend to pay immediate attention to spending and save or invest whatever ever is left over. That approach isn`t ideal. The reverse is a better way of going about it. Work out what you `normal` expenditure is and then set aside a sum which you then set aside for saving or investing.

Financial planning is key to ensuring financial security in later life.

Key to this is getting a firm grip on your income and expenses, identifying, and reducing costs, and building in a series of step ups in savings and investments over the longer term. Sound financial planning aims to help you reach your objectives in that it should signpost the route to achieve this.

Seek financial advice.

Whilst some of these considerations are basic and can be self-managed, it is important to seek professional help to avoid any kind of confusion and problems in future.

To make informed decisions about your planning, or if you have any concerns, please feel free to contact your usual Dentons Wealth Independent Financial Adviser.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.