The Basics for a Sound Financial Base
There are many things in life which can cause us problems – but equally, a well thought out financial plan which is then reviewed on a regualr basis, can often mitigate a lot of life’s financial problems.
People often get into financial difficulty, purely by not being prepared for the main financial ‘emergencies’ that can occur, which is why, for many advisers the starting point for a Sound Financial Base is an emergency cash fund, of sufficient size to meet the costs that occur during life.
Without that Emergency Fund – the regular financial events which occur (your car breaking down or a boiler packing up) can cause not only financial hardship – but more importantly, have far greater emotional effects than they should do.
Therefore, having even a relatively small pot of ‘cash’ always available should make someone’s outlook on life far better.
Once the ‘emergency fund’ is sorted out, for most people, the need to protect ‘what they have’ is the next priority. It may be boring – but Insurance is vital for us and our families.
At the basic level – this is Contents Insurance (and Building Insurance should you own your own home). Although it is a Legal Requirement, Car Insurance is also included at this level.
Strangely, a lot of people will then stop there, when actually for those either with a Mortgage (or other Debts) or Family, it is a real need.
If the main ‘breadwinner’ in the house dies – those bills will still need to be met. Fortunately, a lot of people do have ‘Death in Service’ cover through their Employer – but what happens if you change jobs or you’re Self Employed?
Therefore, Life Assurance, which for the vast majority of people is cost effective, should be considered a ‘basic’ need.
Other forms of protection, such as Critical Illness Cover and Permanent Health Insurance may also be crucial, to help provide Capital or Income, should an individual’s long term financial plans get effected by an illness or accident.
Once someone’s protection needs are met, other medium and longer term objectives can be met – such as saving for a home, retirement or even sending children (or grandchildren) through Private Education or a University course.
The sooner these investments plans are started, the higher the probability of them being reached will be achieved.
This therefore should be an ideal time to review your options - please contact us for a no-obligation meeting and to receive your copy of our ‘The Basics for a Sound Financial Base’ summary.
The above is for general guidance only and should not be taken as a personal recommendation.