Embrace Your Financial Wellbeing

Lindsey Docherty

Monday June 3, 2024

Taking control of your financial wellbeing is a positive step, but it is often an area that is neglected or set to one side, and with so much information available, it can feel hard to know where to begin.

Lindsey Docherty, Financial Planner, at Independent Women* has pulled together some top tips for building the foundations of a strong financial plan.

1. Consider your goals and timescales

Identifying your short-, medium- and long-term goals allows you to plan the steps you need to take to achieve them. Your goals could be anything from a home purchase through to early retirement, but it is important they are specific and quantifiable to help you to visualise the route to success.

For shorter term objectives, search the market for competitive interest rates to provide opportunity for your money to grow, though it is important to be aware of any penalties for early access to fixed term products.

The long term is just as important as the short term. Would you like to invest?  Putting your money to work over a longer timeframe (such as 5 years, or more) provides more options for your money to grow, but it comes with risk as investments are not guaranteed, and values are subject to fluctuation in line with market performance.

2. Set a realistic budget

A budget is an important way to build a picture of your income and outgoings. Accuracy and honesty are key when setting a budget, and there are many tools available online to help you understand yours.

Make a list of your regular outgoings, prioritising your household bills and groceries; this should be considered your ‘core’ expenditure.

Then, you can be realistic about how much you want to save. Savings should include shorter-term savings for emergencies, as well as longer term investments such as house funds and retirement planning. Finally, you are left with your discretionary expenditure, or your ‘fun fund’. You may wish to set some of this aside to pay for the large one-off expenses such as holidays, too.

Top Tip – If you are reviewing your budget for the first time, look at your direct debits, too. Often, you will find better deals on the market, and you may even find some subscriptions which can be cancelled, saving you money in the long run.

3. Build your emergency fund

An emergency fund is a pot of money that is easily accessible for you and your family, acting like a financial shock absorber for any short term ‘emergencies’ (think about the boiler breaking down, or an MOT failure). These often-unexpected events can have more severe consequences without a suitable emergency fund in place and can quickly put you on the back foot in terms of your financial wellbeing.

There is no hard and fast rule on how big an emergency fund should be. It is important to remember that while having easily accessible funds is important, inflation can mean that excess cash held in the bank loses its ‘real value’ over time, so consider the most appropriate amount for you.

Top Tip – If you are unsure how much you should have in an emergency fund, as a starting point we suggest considering your core outgoings, and ensuring you have funds available to meet 3 to 6 months expenditure. That way, if you lose your regular income, you will be able to continue paying your mortgage/rent, bills and more. You can then decide if you feel comfortable with this amount, or if you would like to retain slightly more.

4. Protect yourself for your future

Financial protection is the foundation for any strong financial plan, helping you understand the impact if something were to go wrong, such as if you or your partner were unable to work, were to be diagnosed with a critical illness or pass away. Would you and your family have enough income to keep your goals on track, to repay any debts, and to maintain your standard of living?

While you might already have some insurance in place, it should be regularly reviewed, particularly in light of any life events such as a change in job, a house move, or children.

You should also ensure that you have up to date wills, powers of attorney and pension nominations, as the knock-on impact of not having these in place can be costly and time consuming, and often lead to a different outcome than you might have wished.

Top Tip – Look at your employer benefits and check if there is an ability to increase your cover at a favourable rate. Be aware of what might happen to that protection should you leave your employer.

What next?

Gaining a better insight into your finances is something we can all achieve, but it is just the start! If you want to understand more about the core financial planning principles and how to take control of your financial wellbeing, join Independent Women at our Women in Property webinar - ‘Harnessing your financial power – How to grow and protect your wealth’ - on Tuesday 11th June by clicking the link here.

*Independent Women is the UK’s first Independent Financial Adviser specialising in wealth management for women; we look at money through a female lens, understanding the unique challenges faced by women in managing their finances.

Independent Women is a trading name of Forvis Mazars Financial Planning ltd. The information contained in this article does not constitute individual advice. Forvis Mazars Financial Planning Ltd will not accept any responsibility for decisions taken or not taken on the basis of the information presented. Always obtain independent, professional advice relevant to your own circumstances.

Any reference to legislation and tax is based on Forvis Mazars Financial Planning Ltd’s understanding of United Kingdom law and HM Revenue & Customs practice at the date of production. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments.

Forvis Mazars Financial Planning Limited Forvis Mazars Financial Planning Ltd is registered in England and Wales No 3172233 with its registered office at 30 Old Bailey, London EC4M 7AU. Forvis Mazars Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority. Forvis Mazars Financial Planning Ltd is a wholly owned subsidiary of Forvis Mazars LLP, the UK firm of Forvis Mazars Global, a leading global professional services network.


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