Budgeting – The foundations for financial planning

Budgeting image

Michael Spence

Origen Private Client Adviser

Taking the time to review your financial situation can really save you money and give you greater freedom and control to save for your future. 

40% of people feel they do not have good control of their money or manage it well. 44% of women and 34% of men in the UK workforce have felt anxiety caused by financial stress.  

By regularly reviewing your income and expenditure, it will make it easier for your finances to adapt to any changes in your circumstances. You may also wish to save for less frequent events, such as birthdays, cars, holidays or other large planned purchases. Managing your cash flow can give you better control over your money and help you to plan ahead. 

Our Budget Planner gives you a simple way for you to assess your net income against your net outgoings. Click here to access our Budget Planner. 

Start with strong foundations

A good budget sets strong foundations for working towards your financial goals.  As a starting point, you should have access to a ‘rainy day’ fund to cover emergencies. We normally encourage our clients to have three to five months expenditure kept aside for emergency funds. 

With a budget in place, you should then look to repay your most expensive debts first, whilst taking care to avoid any early repayment penalties and review whether any debts could be consolidated, to reduce your repayments.  

Set meaningful targets

You may already have some good financial habits, but financial goals which are SMART – Specific, Measured, Achievable, Realistic and Time-scaled are much easier for reviewing progress. Your adviser can help to make sure that your financial goals are achievable and affordable. A clear target or objective helps to give a clearer purpose and a stronger commitment for these plans. 

SMART goals need to be personal to you, but some examples are:

  • Repay my mortgage by 2027;
  • Retire at age 62 with pension income of two thirds of my current income;
  • Build up an investment of £20,000 by 2023 to meet the costs for a family event.

Our advisers can help you to review your progress towards meeting your financial goals as well as ensuring that your current plans are still on track.

Meeting your financial goals

Clear financial goals and a regular budget review will put you in a strong position to tackle any financial challenges that you may encounter and benefit from future planning opportunities. With a clear view of your financial position, your Origen adviser can help you and your family work towards reaching your financial goals and review your progress at future meetings.

This article is for information only and is not to be taken as financial advice. This information is based on our understanding as at February 2019.

CA4088 exp 03/2020

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