Personal Finance Answers

Posts Tagged ‘Planning’

Once, the world was simple. If there were two opposites like either/or and day/night, it was easy to treat them as different and act accordingly. Then along came the idea of equality and some opposites were judged the same when it came to the treatment they deserved. At least, it’s now politically incorrect to suggest men and women should be treated differently. So the law imposes rules to prevent discrimination on the ground of sex (or gender if that is also different). Except that, when it comes to insurance, there are some very good reasons for treating men and women differently. Although the law may have changed, there are some fixed biological and cultural roles that seem permanently attached to women. We may now vote, own property and pursue our own careers, but we give birth and are expected to raise a family with the possibility of becoming a carer for elderly parents. In juggling between all these conflicting demands on our time, it’s easy to drop the ball of financial planning. In a perfect world, we women would sit down calmly and set out a plan for our lives. This would list goals and some way to monitor progress so that, if we seem to be straying off track, we can steer back on course.

There would be milestones: getting a job, saving for our own home, avoiding debt, planning a family. If our partner, children or parents come to depend on the income we bring into the household, we should think about insurance. How could we leave them without providing for them? If we are not a burden to them during our lives, we do not want to become a burden by leaving them. So we need enough coverage to clear the mortgage on the home, pay for the education of our children and buy in care for our parents. In this, it does not matter whether we are a single mother or one of a couple. Loss of our earning capacity affects everyone around us. Then we come to the key difference. We live longer than men so the right life insurance policy is our way of saving for retirement. As we reach the end of our working lives, all the major debts should be paid off. Hopefully, we have made pension arrangements and can live simply.

But there are always emergencies. In such cases, having a policy with a cash value or an investment element gives us a safety net. In the worst case, we can sell the policy for a lump sum. With the right policy, we can draw down cash or borrow against the anticipated benefits. This need for long-term thinking means we should take extra care when getting life insurance quotes. We should cover the range of policy types. It may then be appropriate to talk to an independent agent or broker to get advice. The aim is to ensure we have the right level of coverage at an affordable premium during our lives with adequate protection for our retirement needs. Rising above the selfish needs, we can also think about the flexibility to provide cover for the family we leave behind. This may involve planning to increase the investment element as we grow older, or adding coverage to boost the benefits we leave behind at the end of a long life.

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A surprising high percentage of adults pass their productive years without proper financial planning, reacting to events without taking informed decisions. As a result, few set and realise their financial goals, fail to choose the most appropriate financial products, and many fall victims to misleading sales pitch for financial products.The demographic composition of the UK is changing. Life expectancy has increased with better health care and the retired population is growing relative to the working population. The cost contributing to pension fund will increase accordingly, yet there has been a decline in personal saving for retirement.A recent research carried out for the Department for Work and Pensions has highlighted the lack of financial planning for retirement. Only 25 per cent of respondents were aware of their correct State Pension age. One third reported that they have given some thought to much money they will need after they retire to lead a comfortable life. It is estimated that seven million people are not saving enough to achieve the pension income are were likely to need or expect in retirement.The subject of money is difficult to talk about for most people. They find seeing the future a challenge and difficult to talk about. Especially those under 30 are unable to imagine themselves at 70, 80 years of age and beyond. Naturally they lack a clear idea of how they might be living in the future and what they would be doing.Pension planning is a response to life events which effect finances, ratherthan a priority. Events like buying a house, getting married, having children and taking on responsibilities seem to be the external trigger events for planning pension. Around 60% of people surveyed for the DWP research had some form of retirement provision. These include State Pension, company pension, or a house that can be sold or other savings. Key reasons for the group not having provision were because they had other pressing demands on their income and struggle to cope day-to-day financially. Many such people say that they would rather enjoy life now, believe that retirement is too far away and have not given thought to it.Are you one of those who stumble through their financial life? Here is how you can change your psychological attitudes to money and financial planning.Good financial planning requires a strategic long-term plan. The first step is to assess your own particular circumstances, attitudes and timelines and then work out how you can implement your financial plan. Your personal financial plan should include these elements :

You do not need to be an MBA to understand personal finance. You can read recently published books like to the following to help you understand your attitudes to money, financial jargon, and how to set financial goals in life and make a plan :

Accessing financial products and services is quite easy – in fact consumers are bombarded with commercials, advertisements, direct mail, email and marketing calls to entice you to take out long term loans or payday loans, buy insurance and invest your money. But choosing which products are right for you needs basic knowledge of finance. Financial prudence is important to keep your personal finance healthy and growing.

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Every individual cares to plunge into some sort of risk in yield a positive result that might not be expected beforehand. But the level of such risk goes a little high that are based on investments and its procurement. This is because there might not be a single person who is not at all engaged in chasing his treasured dream of becoming reluctant about money before an appropriate financial planning investment. It is a common observation amongst those students who try to study abroad and also for those employees who looks for a stable professional life. A financial advisor in India can offer worth making guidelines before such investments based on financial aspects to such individuals. For desired achievement of the goals an individual can seek advice from a financial planner as well. A financial advisor can also be depicted as a mentor for aspiring individuals that need valid and authenticated information on insurance, tax, etc. which automatically binds itself inside a single financial plan. There are many people who prefer to hire financial advisor in India only when they try to incur or go in search of information on specific issues and matters such as paying down payments, procuring a retirement policy before time, health insurance, investments made on a future aspired project, etc. But no matter with what perception and need an individual looks for a financial advisor, but their profitable suggestions can also help in getting motivation and also confidence before making an investment. But behind all these countable aspects, the first thing that an individual should perform is the calculative assessment at his own risk in matters related to money. A financial planning investment should be entirely based on your personality as no single individual can have similar sort of risk taking trait. Just like the DNA chains of a chromosome every single person possesses unique perceptions and risk taking characters. Some can bear a huge loss while another may not recover from a minor hammering on factors and conditions that deals with finance and wealth. So an estimated calculation counts a lot before any financial planning investment based on considerable factors like present income source of an individual, liquidity, years left before a retirement, health related safety concerns, tax benefits, etc. This is because ignorance maintained before a financial decision in the life of an individual can at times turns him from riches to rags and vice versa for a planned and secured investment of the same.

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Financial world is growing by leaps and bounds and every second person is talking about tax-planning, investment, share market, bank savings account solutions, insurance plans and so many other financial terms. This is because planning of finances is imperative and without it you can develop unfriendly financial implications for you. All you need is a plan or a budget for your whole life and a financial planning services firm can help in that. Read more...

Most place a very high priority on securing their future. Securing the future usually means the preservation of their hard earned money and proper utilization of it. Anyone can accumulate large sums of money over their lifetime. But it can be difficult to keep track of their income and expenditure. And this may lead to monetary problems later. Everyone needs to plan for the future. This financial aspect cannot always be done by oneself. This is where professional financial advisors come in. Read more...