Discover the three essential stages of financial planning that will pave the way to your financial independence.
The Three Stages of Financial Planning
Achieving financial security is a journey that involves three crucial stages. Each stage builds upon the previous one, creating a solid foundation for your financial future. Take the first step towards financial security by exploring each stage of the planning process.
1: Protect
Protect yourself and your dependents in case something should happen to you. All your other financial plans will likely be abandoned if you have no protection against the unexpected.
- Have an emergency fund of at least 3 months of expenditure
- Write a will and keep it up to date
- Consider the four main types of Financial Protection:
Income Protection Insurance
Provides regular income if you're unable to work due to illness or injury.
Life Insurance
Provides a lump sum for your loved ones after you're gone.
Critical Illness Cover
It pays out a lump sum if you're diagnosed with a covered critical illness.
Family Income Benefit
Provides regular income for your loved ones after you're gone.
Financial protection forms the foundation of a solid financial plan. It ensures that you and your loved ones can maintain financial stability even when faced with unexpected life events. By understanding and implementing these protection strategies, you can focus on your long-term financial goals with greater peace of mind.
Learn more about Financial Protection2: Plan for your retirement
Think about your financial future and how much will you need to put away for the day you stop working. You may not want to rely upon a State Pension covering your desired lifestyle. The earlier you start to save the longer you will have to allow your investment to grow. Consider investing a regular percentage of your salary each month so that you get used to not having this excess income to spend away.
For most people they will need to save 15% or more of their monthly salary in order to be able to retire in their sixties. Use our Retirement Planning Calculator to see how adjusting the amount you put away each month can make a difference to when you will be able to retire.
Use our Retirement Planning Calculator3: Invest
Invest a regular amount each month to build towards an important goal. This could be saving for a deposit to buy a property, buy or upgrade a car, or perhaps to save for school or university fees. Investing should be for a goal at least five years away and not for short term expenditures, like a holiday or entertainment which should come out of your monthly income.
Our investment planning calculator lets you see how long it would take to reach your target amount by saving a regular amount each month.
Use our Investment Planning CalculatorFurther reading: Your Financial GPS
If you would like to read further we are delighted to be able to offer a free download of Ben Chapman's book, "Your Financial GPS". It is a comprehensive guide to personal finance covering a wide range of financial topics across different life stages, aiming to help readers make better financial decisions and achieve their goals.
Throughout the book, Ben provides practical advice, real-life examples, and "shortcuts" or key takeaways for each topic. The aim is to empower readers to take control of their finances and make informed decisions at every stage of life.
DownloadSeek Financial Advice?
If you are uncertain of your options, nervous about investing or have further questions then you may want to consider seeking financial advice.
A financial adviser can:
- Tailor an appropriate investment portfolio to match your plans
- Guide you on using the right tax wrappers
- Help you to invest for the long term
- Give you the confidence to invest
- Guide on avoiding scams
- Take responsibility for the advice they give
Disclaimer
Pensions are subject to access conditions and may be subject to change.
The value of investments can go down as well as up, and you may get back less than you invest.
This website is for guidance purposes only and does not constitute financial advice.