Easy steps to create a financial plan for your future

Easy steps to create a financial plan for your future
October 21 05:41 2017 Print This Article

In uncertain economic times, it is more important than ever to have a sound financial plan. Many people freeze at the prospect, or prefer to bury their head in the sand and live with little thought for the future. If you are keen not to be among this group, here are several simple steps you can take to formulate your own future-proof financial plan.

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Track your spending

If we are honest, most of us cannot account for every single pound that passes through our wallets; however, if you are serious about financial planning, it is not only the pounds you need to watch but also the pence. The easiest way to do this is also the simplest: note down everything you spend. In addition to large expenditures, such as your rent or mortgage and utility bills, this means every coffee, newspaper, chocolate bar, after-work pint and donation dropped in a charity tin. You can track this spending either with a small notebook and pen or by using a phone app.

Categorise your spending

At the end of each month, divide your spending into categories: food, transport, utilities, sundries and so on. Track your spending in this way for at least three months.

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Decide on your future financial goals

This could mean saving for a house deposit, putting more money into a pension, or helping your children with university costs. Whatever your goals, write them down and try to work out how much you will need and over what period. At this point, you may want to seek independent financial advice. If you take this route, make sure your chosen independent financial adviser (IFA) comes well recommended. Excellent back office systems for IFAs can also be crucial; if yours has software from a provider such as intelliflo.com, this is usually a good sign.

Check your credit

Financial planning can easily be derailed by credit issues. Keep an eye on yours with regular checks on your credit file. If you think you are running into problems, seek specialist advice from a charity such as StepChange.

Set aside an emergency fund

This is important if you are not to turn to credit or your investment portfolio in times of financial need.

Plan your portfolio

This is the exciting part, and what all the preceding steps have been leading towards.

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Clare Louise
Clare Louise

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