According to a recent PwC consumer survey for Ireland almost half of Irish consumers say they are either extremely or very concerned about their personal finances, and three-quarters of the survey have cut back or stopped non-essential spending altogether. It can be hard to turn these concerns around but as financial planners, our job is to help you improve your financial outlook, to put smart plans in place and protect you and your loved ones in the long term from unforeseen, costly events. There are some simple steps you can take to improve your financial outlook and relieve some of the stress that comes with financial pressure.
Here are our 4 tips on how to improve your own financial outlook.
Developing a habit of regular savings and building up a rainy-day fund is not only sensible, but it also provides security and peace of mind for unexpected events. And once a significant fund has built up, savings can provide the seed money for high-yielding investments and opportunities so you can make your money, make you money.
2. Debt Management
Managing debt is taking control and is a vital part of any financial plan.
Making regular payments and chipping away at your debt will keep you in favour with your creditors for future loans. And in some cases, a good track record could lead them to freeze interest rates and charges on your debt, or at the very least prevent them from taking you to court.
Whatever you do, burying your head in the sand and hoping to get lucky somehow is not a recommended strategy. Often, problems multiply over time. Facing the issue head-on, even with small payments, is usually the most effective strategy.
3. Financial Guidance and Goal Setting
Financial planning adds a touch of discipline to your spending. And setting goals provides direction and gives meaning to your money. In a sense, it makes it easier to spend because you’re more aware of your limits and the outcome of your spending.
A great financial advisor will develop a step-by-step approach to meet your goals. They will help you take control of your income, expenses and investments so that you can manage your money and achieve your goals.
And as the saying goes, ‘what’s measured is managed’ and when you start to measure and track your money you begin to shape up for good long-term financial health.
A widely recommended approach is to frame your goals is the SMART model. Make sure your goals are:
Specific – set clearly defined goals
Measurable – frame each goal so that you know when you have achieved it
Actionable/Achievable – you need to be able to take practical actions to achieve a goal
Realistic – A goal must be relevant, realistic, and achievable
Timely – you should assign a timeframe to each goal so you can track progress and results
Don’t be afraid to ask for help, learn from professionals, and find products and methods that suit your financial strategy. Luck will be just around the corner.
4. Life Insurance
Smart financial management is all about the future and therefore should include life insurance. An annual life insurance premium is a small price to pay to protect your spouse and children from potentially serious financial losses, ensuring they are taken care of with enough money to pay off any debts and cover bills and daily expenses if you’re no longer around.
Not only will life insurance give you peace of mind, but it will also mean you can celebrate taking control of your financials. Afterall, who needs luck when you’ve got life insurance?