What are life’s expenses?

Up to leaving full time education, many of us have few real financial worries, then it all changes:

The desire (or otherwise) for fashion, transport and a lifestyle might require getting a job to provide some ‘disposable’ cash. Some of this might be required to pay for living at home or elsewhere – which becomes a non-negotiable expense. Having obtained a vehicle – the obligation to tax, insure, fuel and maintain the beast becomes another non-negotiable expense and before you know it there is little left over for socialising and having a good time…. Welcome to the adult world!

A singleton becomes ‘an item’ the desire for more and better things, possibly a family, does not end the financial planning need. The saying; ‘Boys never grow up – their toys just get more expensive’ might apply in some cases.

Celebrations of important events, lifetime experiences, helping family in their endeavours may be affordable from income – or maybe lump sums need to be built up within a time scale. Then just as you emerge from that phase – the prospect of retirement can be a threat or an opportunity depending on your circumstances, health and objectives.

Everyone has unique circumstances, some have been ‘employed’ all their working life, some are self-employed, and some run limited companies where an efficient (and confidential) exit strategy is needed. If you make a mistake at this stage, it could be wrong for the rest of your life!

A pension is a good example of an arrangement that can make accumulating funds easier than doing all the work on your own. For example, an employer might contribute, the tax man almost certainly will, a well selected investment strategy can provide additional help and good management can help prevent a significant reduction in value prior to taking benefits. Some pension arrangements can provide more flexible benefits than used to be the case in years gone by, and some arrangements should not be interfered with or accessed before a set date – how would you know the difference?

If you need advice, make sure the adviser is not consciously or by default trying to further their own interests. Take advantage of a free initial meeting so you can measure the adviser against what is important to you.

Issued by Wealthline Limited, which is authorised and regulated by the Financial Conduct Authority.

Past performance is not a reliable indicator of future results and any forecast is not a reliable indicator of future performance.

The information contained in this editorial should not be construed as offering investment or tax advice.