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Time for a summer clean up of finances
7/5/2010
Alok Dhanda explains the benefits of taking some time to clear up your finances this summer.
Now that the emergency budget is out of the way and many of us are preparing for some much deserved rest over the summer, this is the perfect time to take a long look at your finances.
With the hectic pace of day-to-day life, it can be easy to let your personal finances slip down to the bottom of your priorities, but it is so important to keep on top of your money.
You should firstly make sure that you have the most suitable Life Assurance cover in place to suit your circumstances. There are many options to choose from to protect your family from financial difficulty if the worst should happen to you. With the current favourable premium rates over a range of policies, you could secure a cheaper rate, with the help of an Independent Financial Adviser. For instance, if you gave up smoking more than 12 months ago, you will be entitled to cheaper premiums now, so it is worth shopping around for a better deal. Your savings can amount to as much as 50%!
Set aside some time to go through your study or attic and dig out all the old paperwork there – you never know what you may have forgotten about. There may be old policies there that may have matured, or shares certificates which could be worth a lot of money, or you may have old bank or building society passbooks which may have slipped your mind.
It is also important to know exactly how much you are currently paying on your mortgage. With some careful research, and the advice of an IFA, you could find a much better deal to remortgage. For example, there are some good tracker mortgages available at the moment. According to financial information provider Moneyfacts, the average fixed rate mortgage is 5% and the average tracker deal is 3.71%. You could potentially save thousands of pounds, just by spending some time thinking about your options. We now have the lowest interest rates since the inception of the Bank of England, so don’t delay.
If you have recently gone through a divorce, then you may not have had the time or the motivation to review your finances. That is why it is important to relieve any pressing financial concerns on your mind by making an appointment with an IFA, who will sit down with you and guide you towards your new personal and financial goals.
Anyone, of any age, can start being more organised with their money. Grandparents, for example, can set aside some time to update their wills. Too many people in the UK pass away without making a will and it is left up to the law to decide who should deal with the administration of the estate. Married couples often assume that when their spouse dies without making a will, they will automatically inherit everything, but this is not always true, so nothing should be taken for granted.
It is also important to think about who will assist you in dealing with your assets and/or personal welfare during your lifetime, should you become incapable of doing so. By making a Lasting Power of Attorney, this allows people, with the required mental capacity, to name someone who will make decisions on their behalf if they are unable to do so themselves.
If you should lose your mental capacity and become incapable of making a Lasting Power of Attorney, then the only option left to your family or friends is to apply to the Court of Protection. This is an expensive, lengthy option and can delay important transactions so it is far better to avoid this by starting preparations now.
In my 24 years of work, I have never come across anyone who is perfectly organised with their finances. It really is worth keeping your financial documents neatly filed, so spend some time over the summer putting your paperwork in order and it will save you a lot of financial headaches in the future. Don’t forget, billions of pounds are lost every year, as people fail to plan financially.
For further information about how Alok Dhanda can help you with your personal or business planning needs, contact Dhanda Financial, 52 Dean Street, Newcastle upon Tyne, NE1 1PG, telephone 0191 255 8960, or email alok@dhandafinancial.com
