Ten steps to a smooth financial future

Wednesday, April 27, 2011

Category: Consolidation

As the Royal Wedding fast approaches, Baigrie Davies has offered high earning, young newlywed couples some advice – in the form of a ten point financial plan – to help set them up for a ‘better future’.

The Independent Financial Adviser has suggested that newlyweds should consider doing the following:

1. Coordinate finances to ensure that there is a ‘joint personal finance system in place’.
2. Ensure that income exceeds expenditure by creating and working to a budget.
3. Pay off any expensive debts, such as unsecured loans, credit cards and overdrafts.
4. Arrange wills, and think about a prenuptial or postnuptial agreement.
5. Consider property options – for example, if two properties are possessed then look at whether they should be sold, rented out or consolidated to acquire a larger property.  Greater earnings may open up the possibility of less expensive mortgage rates.
6. Consider transferring ownership of assets between spouses in order to maximise tax reliefs and minimise tax paid.
7. Look into Income Protection and Critical Illness cover to ‘protect what matters’.
8. When planning to start a family, consider life insurance.
9. Commence saving into pension funds ‘in a meaningful way quickly’.
10. Maximise the amount of money set aside in tax free ISAs.

Managing Director at Baigrie Davies, Ian Howe, commented: "No doubt Kate and William will have few financial worries, but there are plenty of high earning, young couples out there who need guidance.  This 10-point plan highlights several key areas that should be tackled to ensure they enjoy a smooth financial future."

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Homeowners who would like to organise their finances could consider taking out a secured loan to consolidate any existing debts that may be proving expensive each month, such as credit cards.  One of many finance options available, a secured loan for consolidation could allow borrowers to replace a number of monthly debt repayments with just one, manageable monthly repayment.  What’s more, this single monthly repayment could even be lower than the sum of existing outgoings, thus leaving borrowers with more money each month to use as they see fit.  However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.