5 Own Goals People Score With Their Finances

As we face the challenges with the current cost of living crisis, many people are facing financial hardship.
We will look at 5 common mistakes that people make and why they may be struggling with how to manage their money.

Not having an emergency fund

A third of UK adults have less than £500 in their savings meaning they are living paycheck to paycheck. If something happens such as redundancy or ill health etc. it could drain any savings an individual has and result in a cycle of paying debt with debt.

A financial adviser will always recommend having 3-6 months’ worth of expenditure in an emergency fund that can be accessed quickly should you need it if the unexpected happens.

Being underinsured

Most people have home insurance, car insurance, phone insurance but you are your most valuable asset so why would you not insure yourself? Two thirds of adults in their 30’s don’t have life insurance. This is staggering considering this age group are more likely to have a young family and a bigger mortgage. So how do your family provide for themselves should the unthinkable happen? Life insurance can be complicated, but a financial adviser can help get the right cover, at the right level, for you.

Living beyond our means

This can be a tricky one as you want to find a balance between enjoying your life but being mindful of your future. We are all guilty of going to Starbucks on our way to work or booking an extra holiday that we can’t really afford, but we need to be mindful of our finances getting out of control and one “little” luxury now impacting all the luxuries of retirement.

 Not saving for retirement

If you don’t put your money into the investment market, take advantage of compound interest then you could be working a lot longer than you want to be. Making monthly contributions to a pension is essential for a comfortable retirement. You can work together with a financial adviser to understand how much risk you are willing to take and how much you require in retirement to make sure you are saving enough.

Not having a plan

Without a plan in place how do you know if you are on track to achieve what you really want in life? By having a financial plan in place, it can help you create better habits, jump start your savings and even boost your confidence. Plans change over time, but working with a financial adviser can help weather the storm of those changes and still keep you on track to achieve financial freedom. 

Sometimes even the smallest of changes to your lifestyle now can make such a huge difference to your lifestyle later in life. Financial advisers want to help you find that balance between living your life to its maximum potential now but still being in control of stopping work when you want to and enjoying retirement… after all, it is the longest holiday of your life.

Find out more about our Financial services here.