5 Steps to Prepare for Your Future Financially

Thinking about your future can be scary, especially when you’re worried you won’t have enough money. Luckily, there are plenty of things that you can do today to give yourself the best chance of a happy tomorrow. Making smart financial choices will help ease the pressure on your bank balance later in life. There are plenty of simple ways to boost your finances for a secure future, no matter how old you are right now. Here are 5 easy steps that, if followed, can help you get on track with your future financings:

Make a plan and stick to it.

Before you make any rash decisions, you need to make a plan. This is your chance to get your financial future sorted. Start by writing down your current financial situation, including your monthly bills, debt, assets and liabilities. Your next step is to create a plan of what you want to happen with your finances. This can range from an amount you want to put towards your mortgage to a monthly savings goal for your pension. Keeping your plan up to date is essential if you want to reach your goals. Having the right tools will make it easier to keep track of your progress towards your goals too.

Have clear financial goals

These are the targets you have for your finances over the next few years. They should be well thought out based on what you can reasonably achieve. For example, you might want to pay off your credit card debt, arrange a funeral plan, or save enough money for a holiday. Whatever your goals are, make sure you have a plan of how you will achieve them. Your goals should be realistic and based on your current financial situation. If you want to pay off a large amount of debt, you’ll need to create a budget and make sure you stick to your spending. Saving up for a holiday might mean putting some money in a monthly savings account.

Open an ISA

If you’re in your 20s or 30s, you’ve probably been told to start saving for retirement. But what if you don’t have much money to put away? There is one way to boost your retirement savings, and that’s to open a stocks and shares ISA. An ISA is a tax-free account where you can save money to earn interest. You can put up to £20,000 into one account, and it’s something that you should start as soon as possible. Your 30s are the perfect time to start saving for retirement because it’s the ideal time to start thinking about long-term financial planning. Your retirement might seem ages away, but the sooner you start saving, the better.

Start saving for retirement.

Retirement might seem like something that only happens to other people, but it will happen to you one day too. The best thing you can do is start saving as early as possible. This way, your money has more time to grow. The earlier you start saving, the more time your money has to grow and the more money you will have when you retire. Many employers offer a pension scheme allowing you to contribute towards a pension. Typically this is around 8% of your wages, 3% of which is matched by your employer.

Have an emergency or sinking fund

Emergencies happen; there’s no doubt about that. Whether it’s a car repair, a roof repair, or even a medical emergency, you’ll be thankful for that extra cash when needed. Instead of draining your savings for more minor, less essential expenses put money towards one single fund you can access whenever you need it. By placing a portion of your earnings towards an emergency fund, you’ll be prepared for whatever life throws your way. The aim is to have anywhere from three to six months’ worth of living expenses saved in your fund. 

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