With Aberdein Considine Wealth
It’s possible to save or invest more, simply by being better organised with your money. But many of us don’t quite know where to begin. Here are some steps to help you get sorted.
To start, you’ll need a picture of all your finances, in one place. If this sounds like your worst nightmare don’t panic – it breaks down into four manageable chunks, or lists. First, get a list of all your financial assets (e.g. savings accounts, pensions, ISAS). Then do a second list of all your liabilities (e.g. credit cards, car finance, mortgage payments).
You’re halfway already! Next, set out all your household income. Then, finally, list all your expenditure, split into ‘essential’ (e.g. childcare costs and utilities plus things like food and clothing); ‘discretionary’ (eating out, hobbies, subscription services) and ‘luxury’ (discretionary spend you could live without).
Now you’ve got a really clear picture of your entire money situation, which already puts you way ahead of many people.
But what will this picture tell you? You might find you already have a surplus between your income and expenditure, perhaps more than you expected, leaving you in a strong position to save more or invest. Or maybe it highlights some discretionary spend which you’re happy to forego, potentially freeing up money. It might also help you see ways to pay off non-mortgage debts you have first before anything else.
If you’re considering investing, then some possible next steps include making the most of your annual tax-free ISA allowance. Even if you have just a small amount of surplus income, it’s possible to build a substantial nest egg over time by investing ‘little and often’. And if you’re a higher earner, you could also increase your pension contributions, especially with the new 45 per cent Scottish income tax band coming into effect imminently.
Whatever decisions you do or don’t make, taking some time to organise your money can be a really positive process that gives you peace of mind and opens up more opportunities for the future.
Janice Dallas is a Financial Planner at Aberdein Considine Wealth, based in Waterloo Street. If you’d like some help with your financial plans, please get in touch on 0333 0044333 ask@acandco.com or visit wealth.acandco.com
**This article should not be considered financial advice or an investment recommendation. The value of investments can go down as well as up, so you could get back less than you invested.**
