Lets talk about: The Do’s and Don’ts of Personal Finance

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This article is for readers who want to get ahead with their personal finances. Following the dos and don’ts below will help you work towards your financial goals – whether buying your first house or retiring early.


· Make and follow a budget – ensuring that you keep enough for your essential expenditure and savings before spending on any luxuries.

· Invest for the long-term – Saving all your money into a bank account is very unlikely to keep up with the rising costs of living. Make use of compound interest by investing for the long-term (Einstein called it the ‘8th wonder of the world’!).

· Have an emergency fund – Notwithstanding the above, we would always suggest keeping 3-6 months expenses into an instant-access savings account is a good idea. Having this safety net will ensure you are prepared for any surprise expense without having to draw on your long-term investments.

· Protect yourself and your family – ensure your financial needs are met in the event of disaster.

· Review and monitor – your circumstances and the relevant legislation/tax rules can change from year-to-year. It’s important to make sure your financial plan is still suitable and make any necessary changes if it isn’t.


· Spend more than you earn – this is the fundamental rule for financial planning. To be able to invest for your future you must have money left over at the end of the month.

· Take on high-interest credit – some credit cards and financing arrangements can charge high rates of interest over the term. Financing can sometimes be a useful tool, but make sure you know how much you’re paying – and how much it is costing you to borrow the money!

· Overlook your work benefits – often people don’t pay much attention to their work pension and other valuable benefits (such as life/health insurance), but these form a substantial part of your overall financial plan.

· Underestimate inflation – according to ONS, as of October 2021 living costs over the previous 12 months have increased by 3.8%. Ensuring your income and investments keep pace with inflation is key to maintaining your standard of living, both now and in retirement.

· Have a longer loan than is needed – as you are likely to pay unnecessary interest charges.

If you have questions on any of these, or need help with your financial plan, get in touch with us. Click here.

Luke Worthy, Chartered Wealth Planner

The above should not be relied upon or construed as advice.