Making Strategic Money Decisions

The result of your financial health check may cause you to change your budget, for example to pay for more insurance cover. Or you may wish to change your existing savings and investments to fit in with these guidelines - perhaps to put more into your cash reserve.*

Analysing your savings needs
If you need or wish to save, consider the following: What are you saving for - to increase your cash reserve, for a special event, for your children's education, for retirement - and how much do you need?

How much can you save each week or month and how long will it therefore take to achieve your objective?

Do you need quick access to the money, bearing in mind that you might get a higher return if not?

~ Do you pay tax and, if so, what is your marginal rate? Compare returns on an after-tax basis.
~ Can you save regularly? Irregular deposits when you can afford them are better than nothing.*
~ Is your priority income or capital growth?

Some investments are better for one, some
for the other, but many achieve both. ~ How much risk are you prepared to take? Higher risk should lead to higher returns, but only in the longer term.

Summary points

• A financial health check is the first and most important step towards managing
  your money.
  
• Start from where you are now by preparing budgets and listing any existing savings and investments.
  
• How does your present position compare with the ideal and how can you bridge the gap.

Remember it's always better to have savings than debts such as loans and credit cards.

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