The BBC recently commissioned a survey among 20,000 people asking 'What would you like to do before you die?' The answers were noted and a list of the most common answers was compiled and entitled '50 things to do before you die.'
There were some very interesting answers. In at number 50 was 'to go Polar Bear watching', the animal theme continued to be popular with 'to see tigers in the wild' at number 45 and interestingly, 'to drive a husky sledge' reaching number 38. The travelling theme was also present within the list, 'taking the Trans-Siberian Railway from Moscow to Vladivostok' featured at number 33 and 'walking the Great Wall of China' proved to be a popular choice charting at number 16. However, the silver medal position went to 'scuba diving on the Great Barrier Reef' with the number 1 answer being 'to swim with dolphins'.
Before being asked the 'what would you like to do before you die' question, without doubt a number of the 20,000 would have given their answer straight away and then gone on to achieve their ambition within their lifetime however, it would certainly be interesting to find out how many of those surveyed had never before given such an important question much thought but, having then given this some consideration, had answered the question and then actually went on to achieve their stated goal. I would guess a surprisingly high number. The mechanics for those knowing that their number one ambition before they die was to swim with dolphins could be considered surprisingly quite straight forward. Surely it would be a matter of deciding where in the world they could carry this out, what the actual cost of the exercise would be together with when their budget and diary would allow such an activity to take place. It could be argued that the most difficult part of such an exercise is simply deciding what it is you would really like to achieve in the first place!
Financial Planning is no different. The actual mechanics of the process although interesting, at times intimidating but ultimately quite exciting, are relatively straightforward. Once you have established what it is you would like to achieve you may be confident enough to tackle these issues yourself. However, just as many call upon the specialised services of accountants and lawyers, finding a good, experienced financial adviser with whom you can build a long lasting working relationship is likely to help you achieve your goals more quickly.
Fifty is a pivotal age
In financial planning terms, fifty is quite a pivotal age. As a 'thirty-something' many consider the world is at their feet, and then,
possibly discovering life really begins at 40! While approaching the half-century may seem like the half time whistle went a few years ago, in reality there's hopefully a long way to go as yet! Victor Hugo once said 'Forty is the old age of youth. Fifty is the youth of old age.' Whether or not you see your fiftieth birthday as a major mile-stone of your life it certainly is an excellent 'target date' by which you could judge if your financial priorities have been achieved or are on track to being achieved.
And for those who are approaching fifty now is a good time to take stock of your finances as the good news is you still have time to prepare for the next major milestone in your life which is likely to be your retirement.
I am sure we all dream of a future free from money worries and many would agree the earlier you start to plan the better as this makes it easier for your goals to be achieved. Therefore, the check list below is designed to help you plan and prioritise the 10 things to sort out before you reach the big five-a!
1. Check your budget
If you haven't done so for some time, you should review your current living costs. Start by listing your essential monthly outgoings such as your home loan and food then, after including those items you would consider important, add in the monthly items you would consider treats and luxuries. Interestingly, this exercise leaves many scratching their heads asking 'where does the money go each month!' Once you have worked out your regular monthly outgoings, hopefully there is some money left which can be classed as your disposable income. This may also be a good chance to highlight the areas where money can be saved, perhaps by shopping around for better deals on your regular bills or on your insurance for example. If it turns out, by working through the check list, that you need to save more for your retirement years or to start thinking for your child's future, you will have a better idea of how much you can really afford.
2. Review your savings and borrowings
It's a fact of financial life that it usually costs more to borrow than you can earn by saving. So the message is this: if you have cash to spare, you should probably use it to pay off your debts first.
3. Review your protection
Are you sure you have enough life cover in place? Should the worst happen to you or your partner how would the family cope? Many base their life cover needs simply on the amount of their outstanding debt. However, as any monthly budget chart usually shows, the majority of one's income tends not to be spent on servicing loans but rather on regular family living costs such as food, car expenses, school fees and electricity and water bills. Clearly, in the event of your death, your family will still incur. Should your children be young it may be difficult for your partner to continue to work, due to the extra care your children may need. Of course, your family could be entitled to state benefits but a cash lump sum gives an extra cushion of security at such a critical time. It's worth adding up how much cover you have in place, and working out how much you may actually need. Amazingly, good life cover doesn't have to be expensive and you will usually find it's a lot cheaper than you thought. You should also consider 'staying alive cover'. You know what they say 'if you do not keep up your home loan payments, your home may be at risk'. If you fall seriously ill not only would it affect your health, but it could also have a devastating effect on your finances as well. It is now possible to protect yourself from the financial implications of a heart attack or cancer for example.
4. Update your retirement planning
Many people know that the state pension won't take them very far. But do you know how much you will actually receive? By contacting the Government department responsible for pensions it is possible to get an idea of what you can expect to receive when you retire. An independent financial adviser can also help you find this information. Retirement should be the longest and happiest holiday of your life, but like with all holidays, it's good to work out how much you can afford to spend in advance. The good news is that you probably still have time to build up funds to provide for those special things in your retirement years.
5. Keep track of your existing investments
You may already have started to save for the future; but do you know how well your investments are performing? Are they on track to achieve what you had hoped for? By reviewing their performance on a regular basis you will have time to do something given that they are not growing as expected. These days it is much easier to research funds on web-sites, maybe you should also get a second opinion from an independent financial adviser? You may get a nasty shock if you fail to review your investments and wait until the day you need them!
6. Lay a nest egg
Perhaps you have some major expenses in mind – possibly helping your children with their education or wedding, or maybe going on a world cruise when you retire. A fixed regular savings plan or a minimum period investment is a good way to get the best returns, and also helps keep your money away from temptations. You don't even have to take big risks to achieve better returns than the interest rates offered by the Banks.
7. Plan your will
If you haven't yet made a will you should do so without delay. Preparing a will is the best way of leaving a record of what you want to happen after you die. If you do not do so, your loved ones would be left to sort out the problems, at a time of great stress. Speak to a suitably qualified professional person about the benefits of having an up to date will.
8. Give your kids a head start
Start the saving habit young. A good idea is to open a savings account on the children's behalf and let them see it grow. Whether it's buying their first car, funding a fantastic wedding or helping them through university these things cost money! Planning as early as possible will solve many future financial worries and will make their dreams come true.
9. Invest for Income
You may have built up a sum of money in the bank, from the sale of a property or by investing wisely, yet at some point, it will be important for you to actually see the benefit of your hard work. You may then need to consider changing your investment strategy from 'growth' to 'income'. In order to achieve better returns you may have been happy taking a risk with some of your money. But can you now afford to lose what has been taking you years to build up? Investing for income generally means taking a lower risk and seeing the benefit each month or each year in the form of an income payment. Ultimately, it's your money and you should enjoy it!
10. Keep an eye on the parents
A large number of people need to have some form of financial help or may even consider going to a nursing home in their old age. It therefore makes sense to talk things with your parents, regarding their wishes should this eventuality arise. Thinking ahead can really help and with the correct planning and preparation any future financial burden will be greatly eased.
