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Saturday, 25 August 2007 08:00 |
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Sex has a lot to answer for … babies usually … which then with
time and much financial investment grow up to be beautiful
mutations of their parents. Yet as the family absorbs more money
as it grows, the need for financial planning and protection
becomes more important. So, where do you start and how do you
move your finances forward?
First of all there are “The Considerations”:
* If surplus funds become available, could these be invested? If
so, will you choose a medium or long term investment? * Will you
need an emergency fund? * Will you need to save for short-term
events such as Christmas, holidays and birthdays? * Are you
ready to save for a pension? Do you need to include your partner
in a pension plan? * How much financial planning do you want to
do your children? For example, is private education an option or
priority and do you want to start saving for university fees? *
How much borrowing will you need to do for buying a home and is
it worth considering a mortgage payment protection plan? * Is
life insurance or life assurance worth considering as security
for your partner and family? * Do you need income protection
insurance? * Are all of your belongings and possessions
adequately covered by household insurance?
Then there are “The Resources”:
* Have you taken advantage of all the family finance government
initiatives involved? These include Child Benefit, Child Tax
Credits, Child Trust Funds (CTFs) and the Educational
Maintenance Allowance (EMA) scheme. Directgov is an excellent
resource for information on public services
(http://www.direct.gov.uk/Homepage/fs/en ) * Do you have the
best possible deal on your finances? This includes your credit
card, any secured or unsecured loans, your mortgage, remortgage
and insurance. If you’re not sure, it’s not difficult to do some
investigative homework. Moneyfacts ( http://www.moneyfacts.co.uk
) and Moneynet ( http://www.moneynet.co.uk ) are two popular
sites for consumer research on financial products. If you live
in the US, the website Lowermybills may prove helpful
(http://www.lowermybills.com/ ).
And that’s just when the kids are still young. Once they’re well
established at school, you may wish to still evaluate the
emergency fund, medical insurance and protecting your income
against illness. The risks may change as the family develops so
don’t think that financial planning is a one-off event. Keep
these issues in mind as your funds change.
As you get older you may wish to consider writing your will and
inheritance planning, planning for long-term care, protecting
your capital, continuing your income should anything happen to
your partner and even indulging your grandchildren. There are a
variety of publications from companies such as Which? that can
help you tackle what may seem like impossibly complicated tasks.
If you’re aware that one of the above issues needs to be
tackled, don’t neglect the gut feeling. Ask around for financial
advice, but be aware that you need to be the decision maker, so
gather as much information as you can and then make an informed
decision. If the advice is conflicting, accept that financial
success may always be based a little on luck and risk, though
nothing excuses thorough research and planning. Read the papers,
surf the web and ask around: the information is accessible!
Resources:
http://www.moneynet.co.uk/
(Moneynet)
http://www.moneyfacts.co.uk/<
/a> (Moneyfacts)
http://www.switchwithwhi
ch.co.uk/ (Switchwithwhich)
http://www.direct.
gov.uk/Homepage/fs/en (Direct Gov)
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