Assessing your finances during lockdown

This month Chartered Financial Planner Gemma Wood takes the helm on my blog to helps us take control of our finances in these unprecedented times. Based in Edinburgh, Gemma helps clients make a financial plan so they can focus on the more important things – like enjoying life!

From financial worries to financial control

Our relationship around money and finances is complicated; it can bring up feelings of fear and insecurity as well as joy, excitement and security. We find ourselves in challenging times at the moment and much has changed for us all. Financial worries are a particular concern for many ranging from ability to meet current outgoings due to loss of or reduced income to the impact of the economy on future job security.

The current financial climate is scary and there are a lot of things we can’t control however we can control elements of our money and this should bring some reassurance. Whatever your relationship with money, there are things that individuals and households should address and review on a regular basis to take control of your finances.

Seven steps to reviewing your finances

Below are seven key points to address when considering your and your family’s financial planning:

  1. Do you have a household budget? Do you know where all your money goes? It’s helpful to review bank statements regularly for Direct Debits you no longer need (or can pause) and document it in a way that suits you, either on paper, a spreadsheet or via an app. It’s essential to have a plan for your money each month and set aside savings first.
  2. Top up that ‘rainy day’ fund. Knowing you have a pot of cash available for emergencies takes the pressure off paying for the unexpected. Work out what amount feels comforting to you and aim to build that. You are likely saving money right now in some areas (although not the food bill!) and perhaps some could be redirected to this savings pot.
  3. Are you claiming Child Benefit and Child Tax Credits where available? Check out the Government Website to see if you are entitled to any further benefits. The Childcare Choices section is great to guide you on your childcare choices when they come back into play.
  4. Review what life and critical illness cover policies you have (or don’t have!) and are they still appropriate for your life and finances now? It is also essential to consider what your current sick pay situation is if you’ve changed jobs or become self-employed so you can still pay your bills during periods of illness.
  5. Check your Will is up-to-date (or that you have one). Whether you’re married or not and have assets or not, a Will makes sure your estate with is dealt with quickly with minimal hassle for your loved ones. Most importantly make sure that you have noted your wishes regarding Guardianship for your children. It’s often not an easy decision but if you’re having trouble deciding, imagine how tricky a court will find it!
  6. Think about your retirement. Have a review of your pension plans and think about increasing your pension contributions by 1% each year. Every bit helps and a little extra now can go a long way later on. Whether you’re employed or self-employed, take some time to consider what your retirement strategy is and how you are planning to fund the longest holiday of your life!
  7. Consider saving for your children. Regular or lump sum payments can have a significant impact on the choices an 18-year-old can have in terms of training, education, property purchase or whatever they require to establish themselves as young adults. If you start early, the power of compound interest can transform even small sums.

There is help and guidance available if you want to have more control and security surrounding your financial planning and I am here to help guide those conversations. With many of us having more time on our hands and likely more uncertain times ahead, this is the ideal time to ensure your finances are in order and in line with the direction you want your life to go.

‘A budget is telling your money where to go instead of wondering where it went’. 

John C Maxwell

For straightforward, practical steps towards a more secure financial future, please get in touch with me, Gemma at gemma.wood@sjpp.co.uk

Gemma Wood, MA (Hons) APFS, Chartered Financial Planner, Tweed Wealth Management 

Tweed Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website

Photo courtesy of Kristin Hardwick