5 Effective Ways To Future-Proof Your Finances

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Finance is a difficult topic for many of us for various reasons. For those with chronic illness who may have lost their jobs and spend a small fortune on health-related costs, it’s not easy to imagine budgeting for the future because the present is hard enough. If you’re in a position to, giving a little thought to your income and outgoings, your targets, and where you might need further advice and support, can give you a chance to make changes. None of us know what the future holds, but this collaborative post takes a look at some suggestions to help stabilise your finances now and in the years ahead.

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Even if it seems like a long way off, the more prepared you are for the future the better. It’s a good idea to have a retirement plan in place and to be proactive about estate planning. There are also a few ways you can adjust your daily spending and saving to ensure you get your finances in order. With a little bit of organisation early on, you can protect yourself for the future. Here are five effective ways to future-proof your finances.

1. Diversify Your Investments

It’s not a good idea to keep all your eggs in one basket, so where doable you should aim to diversify your investments in multiple areas. This will help protect your finances as different types of investments will react in different ways due to changes in the economy. You could divide your investments between property, stocks and bonds, or even look into self managed super fund investing. This way you can keep your portfolio nice and varied. Make sure to do your research before making or changing investments so you can make better informed decisions., and don’t go for risky investments if you can’t afford to lose the money. There are bonds and bank ISAs that provide safer options so shop around and compare products to see what could be most suitable for your money.

2. Be Proactive With Estate Planning

Even though it’s a bit of a daunting issue, it’s advisable to be proactive with estate planning. This way you’ll have peace of mind that you’ve decided what will happen to your money and assets when you’re no longer around. Thinking about a will and what happens when you’re gone is not pleasant but it can be very important, especially if you do have property, investments, items or money in your possession. You want to make sure that your wishes are known and upheld, such as providing for children or other loved ones. It’s also important to account for things like inheritance tax and other charges. You can find more information about your options on the government website. 

3. Consider A Retirement Savings Plan

If you work for a company, you might be eligible for, or already enrolled in, their pension plan. Many people decline when they’re younger and feel it’s too early to think about retirement, but it’s not a bad idea to give it some thought. You can also speak to your bank about the different types of retirement savings plans they have to offer as they’ll be able to give you tailored advice according to your unique situation. You can choose the best savings solution for you at the moment and discuss ways to protect your retirement savings plan. Even if your retirement is a long way off, it’s important to have emergency funds at least for some peace of mind.

4. Clear Your Debts

While it’s usually far easier said than done, clearing your debts should be a priority because otherwise they’ll hang over your head and continue costing extra money in interest. There are a number of options for paying off your debts, so hopefully you’ll be able to figure out a way forward whatever your situation. Some people make snowflake payments and open interest-free accounts to move the debt into in an attempt to pay it off in that period. You could consider consolidating your debts into a pre-arranged payment plan and pay them off bit by bit. It depends on your situation and your income but you can get free debt advice online to help you manage your debts. Paying off your debts may take time, but if you can manage to do so then it’ll help protect your future finances and improve your credit score.

5. Make A Realistic Budget

Try getting the bigger picture for your finances, looking at your income and breaking down your outgoings to see exactly where your money’s going and where savings could be made. You could try the latest budgeting apps to help you control your spending, and some apps or banks also enable you to set up small regular savings. It’s also important to think about the type of lifestyle you want in the future, along with any medical needs you have to account for, and budget for this as well. This will enable you to come up with a more detailed plan without too many shocks and surprises further down the line. Try setting yourself specific financial goals this summer and then you can monitor your progress, using a budget to guide you and your goals to motivate you.

Debt and money worries can, for some people, cause a significant amount of stress, depression and isolation. Don’t go this alone – please seek financial guidance and speak to your bank for practical support, or consider talking to your GP if you’re struggling with your mental health.

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[ This is a collaborative post ]