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Going back to basics - day to day

13 June 2023

It is great to share people's financial plans and planning as part of our daily work as independent financial advisers. Over nearly two decades, I have also had the opportunity to look at topical points and features that individuals might want to consider on the local radio of BBC Surrey and BBC Sussex. My latest notes feature some important 'back to basics' points, and I have detailed these below.

The world is busy, busy, busy with all things electronic in every aspect of our lives. This is the same for money transactions, and protecting yourself from scams and data breaches is an ever present and growing problem. As an example, one large UK pension fund's administrator had a data breach earlier this year which may have affected up to 470,000 people. Sadly, some members of the scheme directly affected with their personal details being harvested (or 'exfiltrated' as they call it) have only found out officially in the last few days.

The ever-growing numbers of bank branch closures has not helped the situation.

The way we manage money in our day to day lives has changed, but the principles of good home management have not. Some thoughts to help:

  • When is the last time you changed your banking and savings passwords? If not recently, then get them changed now. Set a diary note to do this once every 6 months and get your partner and other family members to do the same.
  • Open a separate bank account with another provider, however small the amount deposited. You know that we advocate shopping around to get the best savings rates but having an account with a separate bank/building society means that you may have another pocket of money to access if your main account goes wrong. In these difficult economic days, it's hard to find extra cash, but if you can find ad-hoc amounts, then put them aside with another bank (hopefully now earning some interest) for a rainy day. Look out for banking charges and terms and conditions.
  • Check your credit report once every 6 months / year. There are various agencies that will allow you to do this free (Experian / Clearscore / Money Saving Expert as examples), to ensure that what you think is going on with your financials is all correct. Please do check the T&Cs for the service you plan to use.
  • Check your payslip and bank account statements regularly to see if any changes occur or to see if there are any odd entries. Check out why if you find anything.
  • If you are not confident with using money electronically, then keep a cheque book. Cheques still work and can be used where electronic payments might be tricky. The recipient might be confident to scan the cheque in via their bank app; many now allow up to £5,000 in a day.

These are not sophisticated changes, but things that we should be doing regularly as part of our money housekeeping. Please do update your passwords if you haven't recently.

But what about your long-term money planning?

DIY for your future money planning (life stage planning) – get the wallpaper out!

We get to meet lots of people to talk about their financial planning. Sure, there's lots of facts and figures about where they are financially, but many have not really thought about what they really want to do looking forward. This might be approaching a life junction, such as retirement, but it is applicable to all life stages, such as a career change, or a divorce.

Often, we also find that any future plan may not have been shared with a partner. Our answer…get the wallpaper out!

Take a length of wallpaper, perhaps 3-4 metres long. Lay it blank side up and draw a line down the middle. Divide the line into time zones to suit, such as 3-5 years, to a future point that again suits.

Give a marker pen to each partner and each adds to their side details of what they expect and want. Life issues can be noted and detailed visually, such as:

  • Planned retirement date
  • Children leaving home
  • When a mortgage ends
  • When the state pension starts for you
  • Expected promotion
  • When the sale of a house / business will come up

Add to your 'life-diagram' over an hour or so, and then roll it up and put it away. Re-visit a few times to see how the life plan changes. Great feedback received on this one and many previously unexpressed plans and aspirations can be revealed.

There is no individual advice in these points but they might provide a guide or a healthy 'nudge' and reminder of what might be considered as the summer moves into full swing.

Keith Churchouse FPFS
Director
CFP Chartered FCSI
Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899


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