AN EXPERT GUIDE TO FINANCIAL HEALTH

Clients

Thursday 22 October 2020

22 October 2020

Welcome to UniCredit's financial planning month! Here are five expert tips for excellent financial health

2:00 Min

October is a time to re-evaluate budgets and regain control of our finances. The Covid-19 emergency has taught us that everything can change at a moment’s notice: financial stability or prosperity is not guaranteed, and we need to take steps to mitigate uncertain economic times.

1 Take time to plan

“What is your financial plan?” feels like a daunting question, but the task is much easier than it seems. Create a document detailing your financial goals, such as the debt you aim to pay off, personal savings you want to accrue, and future objectives, such as retirement planning. The target is to create a blueprint based on your own circumstances. Start today using these ten DIY financial planning ideas.

2 Create a budget and stick to it

We always spend more than we should.  Only 31 per cent of Millennials have a budget, and only a third of those who have a plan stick to it. Try to track income and expenses within your financial plan. The secret to successful budgeting is starting with a realistic approach that reflects your spending habits, revising the budget frequently, and if you miss a target, figure out why and make adjustments. Follow Forbes’ 7 simple steps to fool proof budgeting, along with today’s best budgeting apps to guide your progress.

3 Learn how to save

Track what you spend money on and try to put some aside for the future. One approach prioritises real necessities, such as food and rent, with extra funds to be allocated towards savings. Another approach is to think about saving through automated monthly transfers to a savings account. A third approach is to gamify saving by incorporating “no spending” days or a “cash only” week to challenge yourself to stay on budget. Join the NYT’s 7-day money challenge to tackle seven tasks each week to strengthen your financial well-being.

4 Understand debt

According to the Financial Times, interest rates will stay near zero for the foreseeable future, and low rates make borrowing money cheaper. Now is an excellent time to be strategic about paying off your credit card debt, as well as debt through loan consolidations and mortgage refinancing. For more direction on debt management, learn here or ask one of our Group’s advisors today.

5 Prepare for “what if” scenarios

The last step is to assess your overall financial outlook. A “what if” analysis asks questions like “does spending less now allow me to retire earlier?” or “what if my savings today do not support my retirement?”. Learn how to apply this method to your money habits now for a better financial future.