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Out of Debt, With Savings and On Track for Retirement. So What’s Next?

fb Out of Debt, With Savings and On Track for Retirement. So What's Next

If, in the past five years, you have managed to pay off your debts and start to plan for retirement, you are in a small minority. Despite the urgings of the Chancellor for the nation to live within its means, personal debt was reported last year to have hit record highs.

Britain’s love of spending and the availability of credit has left us more indebted than we were in 2008, but for a diligent few, the rewards of a debt free existence can be savored.

Getting to a level of financial health that means that credit card spending is under control, personal loans are gone, a mortgage is paid off and you have a retirement plan with regular pension contributions may seem like financial utopia, but are there other financial needs to take care of?


The more you save, the more financial security you have, as savings are a way of future proofing yourself against the possibility of redundancy, illness, or major life change that disrupts your power to earn.

Financial expert Alvin Hall suggests that everyone who is earning should try to put away ten percent of their income each month since, according to Hall, the evidence points towards the fact that savers do not notice ten percent leaving their total disposable income.

Keeping track of your spending

One tried and tested method of understanding where your money goes, and subsequently how you can protect it and make it work more effectively for you, is the keeping of a spending and saving diary.

The problem with spending is that we do so much of it unconsciously and we have little idea of precisely how much we are spending (or wasting).

If you have a particular savings goal a financial diary or journal can help to motivate you to stick to your targets, and you can also discover what emotional spending triggers there are. Some people spend too much when they are happy and others fritter money away when they are stressed or miserable.

Goal Setting

A financial diary can help you with goal setting, particularly with big ticket items such as paying off the mortgage, or paying for a child’s university fees.

If you are going to set goals then it’s advisable for them to be SMART (Specific, Measurable, Attainable, Realistic, and Timely). This means that you need to Specify how much you want to save (ideally to the last penny), and to track (Measure) how much you are actually saving each month.

Your saving goals need to be Attainable and Realistic: There is no point in trying to save 80 percent of your income each month if your goal is impossible. All you will teach yourself is that saving is impossible, and this will lead to a downward spiral of declining motivation and you’ll actually be in a worse situation than when you started.

Keeping your goal Timely, or within a particular time frame (say, six months), will also keep you motivated. Things that are too far away (20 years or so), lose their meaning.

Get Advice

Finally, the money you work so hard to earn should ideally be put to work instead of doing next to nothing in a low interest savings account.

Investing is an essential part of any long term wealth protection strategy, which means that it is probably a good idea to get some investment advice before you make any major financial decisions.

This may be a good time to get some financial advice from a professional financial adviser who can give you a clearer picture of your choices and explore how to maximise your money.

If you would like some investment advice, click here for further detail

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