It‘s easy during your twenties and thirties to be too busy making money to plan what happens to it. You may be fully occupied building up your business, getting married or starting a family or you may be single with a hectic social life and little time for financial planning. But this is the ideal stage in life to formulate a plan that balances your current financial needs against future requirements and aspirations.

 

So, what does happen to your earnings?

 

Some you spend

We all have outgoings, some of them fixed and unavoidable, others reflecting the choices we make about how we live our lives. The higher our disposable income, the more scope we have to choose what we spend on our homes, cars, clothes, holidays and other leisure activities. So, ironically, it is often the affluent who have less idea of where their money is going than those who really do have to take care of the pennies.

 

Monthly income may vary for some people, whilst outgoings fluctuate for virtually everyone. So there may be a surplus one month and a deficit the next. This matters not when you have savings or a credit card as a cushion in deficit months, provided that the long-term trend is positive. But using these perfectly normal financial tools can make it hard to judge whether you are making optimum use of your money.

 

It makes little sense, for example, to pay high interest on credit card balances when they could be paid off with money that earns a much lower after-tax rate in a bank account.    Professional financial advice can address such issues and help you take firmer control of your personal cash flow without severe belt tightening. It can also help ascertain how much you could afford in additional outgoings - mortgage repayments for instance.

 

Some you save

If, as is likely for a young businessperson, you are indeed too busy working to spend all that you earn, money is probably accumulating in your bank or building society accounts. It would probably pay to investigate the interest rate levels because, putting security and overnight comfort issues to one side, some rates are so low that you might just as well stuff it underneath your mattress. This money should be working as hard as you.

 

Depending upon your circumstances, you could place some of your wealth in investments that have the potential to grow over the medium to long term in order to meet future financial needs. You won't want to tie it all up in a pension scheme, but it is never too early to think about pension provision and putting away a regular amount that does not threaten your current and medium-term plans and living standards. 

 

Some you never see

A large slice of your earnings, up to about half for a higher rate tax payer, can go in tax and National Insurance contributions. Income Tax may be mitigated through full use of personal allowances and Individual Savings Accounts as well as pension contributions. Enterprise Investment Schemes and Venture Capital Trust arrangements may also be relevant to you and your business, whilst Inheritance Tax issues are also likely to arise.

 

How to sort your finances when you're so busy?

Investment and taxation are complex issues and, however well you know your own line of business, you would almost certainly benefit from the services of a specialist financial adviser. A little time set aside now should reap rewards later. I shall be pleased to arrange an initial discussion, to enable you to appreciate how a professional financial review would address your current and future personal financial needs.

 

Wondering about the cost?

This initial meeting would be free of charge, with no obligation to take matters further. However, through a regular review of your financial situation you will know where you stand in achieving your financial objectives. Your money will be working for you, leaving you free meanwhile to get on with your work and your life. As an Independent Financial Adviser I can research the entire market place to find the right products for you.

 

Want to know more?

Just give me a ring on 02920 359 359 or email craig.palfrey@parkrow.co.uk to book an appointment. If you are uncertain about anything and don't want to make an appointment straight away, feel free to email me with any questions and I will do my best to provide any explanations required. Otherwise, visit our website http://www.getfinancialadvice.co.uk/ to see more about how we can help successful people with busy lives.