Money management tips

1. What are your Priorities?

Have a clear idea of your priorities in life – identify the things that are most important to you and your partner/family and start to plan for them.

• In the short term e.g. next year’s holiday, moving house;
• In the medium term e.g. having children, travelling, start your own business;
• In the long term e.g. retirement;

Write these priorities and review them regularly. Don’t forget – fail to plan then plan to fail.

2. What it’s worth?

Know your net worth. Your net worth is the difference between what you own and what you owe.

3. Budgeting

Draw up a budget and make sure you stick to it. You should spend less than you earn, so work on ways to cut your costs and/or find other ways to increase your income, rather than borrowing to pay bills or to pay for shopping/holidays.

4.Debts

Borrow only what you really need, and before you commit know the true cost of your debts: as the interest payments can greatly increase the total cost of a purchase. Work out a plan to pay off your debt as quickly as you can - your high interest debts first, like credit cards and hire purchase etc.

5. Stash some cash

Save for an emergency fund or 'cash cushion' of 2-3 month’s income (this is important to do even if you're paying off a mortgage, but not if you've got high interest debt). This will help cover you for emergencies such as if your car breaks down or you lose your job.

6. Save!

Once you've paid off your high interest debts, start saving on a monthly basis for your shorter and medium term goals e.g. a summer holiday, a new car, Christmas, house renovations etc.

7. Get yourself protected

Protect yourself and your assets. Make sure you and your family have the right amount of insurance against illness, accident, death.

Other tips on protection:

• Are your main assets like your car and house covered?
• Make a will
• Do you need a trust or a power of attorney in place as a precaution

8. Retirement plans

Make a financial plan for your retirement. Do you have access to a workplace pension scheme? Even if you still have debt, seriously consider it, especially if your employer will make a contribution too.

9. Investing – not just for the rich

Investments are not just for the rich. It opens up opportunities to make your money work harder for you over the long-term. Also look into ways to help reduce the tax you have to pay on your returns.

10. Spread the word

Teach your children/grandchildren about money – the earlier they learn, the better they will be at managing their money.

Useful Links

What’s it Worth
http://www.calculatorweb.com/calculators/netwcalc.shtml

Budgeting
http://www.moneysavingexpert.com/
http://www.moneymadeclear.fsa.gov.uk/pdfs/budget_ink.pdf
http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=budget_calculator
http://www.moneysavingexpert.com/banking/Budget-planning
http://www.moneysavingexpert.com/protect/demotivator/

Debts
http://www.moneymadeclear.fsa.gov.uk/pdfs/borrowing_money_ink.pdf
http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=debt_test
http://www.moneysavingexpert.com/loans/debt-help-plan

Save!
http://www.nsandi.com/savingneeds/healthcheck.jsp
http://www.moneymadeclear.fsa.gov.uk/pdfs/saving_and_investing_ink.pdf
http://www.nsandi.com/savingneeds/healthcheck.jsp?step=step2
http://www.moneywise.co.uk/grow-money

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