Financial tips to inspire not make you snooze (yes: they exist!)

Even though we’re a financial planning firm, we’re willing to admit that finance can be one of those things that causes people to switch off. Note the emphasis on can be. Thinking about your finances can also be exciting because it means you have to think about the effect that various scenarios could have on your life.

We’re not about to tell you how to go on a budget or balance your books – we’re going to run through a few vital “what if” scenarios that you might want to think about. Although they may sound extreme, they should inspire you to really think through your financial situation.

What if… the main earner in your family fell seriously ill or died. Think about how your family would manage. Consider whether you have adequate life insurance to cover you in case of an event like this. Would there be enough money to enable your family to pay the mortgage? Would your children still be able to have help with their university expenses?

What if… There was a major recession. This could mean that your shares would fall sharply in value and you could face an incredibly tough environment to do business in. Do you have the cash reserves to cover you in this case? If you’re a business owner, do you have contingency plans for a recession?

What if… You lived far longer than expected. The American Department for Social Security predicts that a quarter of people who are now 65 will live beyond 90 and one in ten will live past 95. If you’re much younger than 65, the chances are even greater as biotechnology and advancements in pharmacology look set to revolutionise old age.

This means you could face a three decade long retirement. Scary, right?

A really long retirement means it will be easy to outlive your savings. Do you think you’ll have the savings and extra income to see you through 30 years of living, spending and inflation after you retire? When you add in the cost of potential care it can be truly frightening to think about. It’s a sobering thought.

You can take action

We don’t want to worry you. We’re sure you already have more than enough things on your mind. But we do want to encourage you to take financial planning a little more seriously – just to think a little more about the overall effect of your financial choices. Taking a well-considered approach to your finances can leave you in a better situation – a better financial situation at least – should the unexpected happen.

Getting things that might seem like minute details today can pay off.

If you have any investments, try to make sure they’re in well performing funds. Also, have a close look into how you’re being charged on your investments and if these charges seem to be a bit too much. Bear in mind that the charges might not be clear. There might be hidden fees like exit fees which can leave a bitter taste further down the line.