It's Your Money ...

Andy Maher, Independent Financial Adviser suggests ways to help make your money go further...

Despite the current financial doom and gloom, we are trying to keep an optimistic eye on the world of finances and believe that long-term planning is the key to future financial security. If it's true that history repeats itself, then we can almost ‛expect' an economic downturn approximately every seven years or so. Unfortunately, we are now in the thick of it with the media predicting more gloom. But there are ways to focus on the bigger, long-term picture whether it's following some sound budgeting advice, taking a long hard look at your expenditure or forking out for some valuable insurance.

Let's take a look....

The cappucino effect:

If you gave up this every working day: (approximate costings)

Coffee shop Cappucino £2, fizzy drinks 75p, pre-packed sandwich £3, and had this instead:

Coffee at home, bottle of tap water, packed lunch - you could save up to £100 every month.

Really take a long, hard look at your weekly and monthly outgoings. Everyone can trim down their monthly expenses in some way. Whether it's simply changing where and how to buy your groceries and buying only what you need, turning down the heating and bringing out the jumpers or cancelling the sky tv, there are ways to save money.

Visit Martin Lewis' www.moneysavingexpert.com website to download a budgeting planner.

Just as an example - look at the things that add up:

Daily paper 80p
Takeaway at the weekend £10
Ready meals £3 - £6
Odd drink after work £4
Sky TV £30
Odd taxi £5

TOTAL - around £100 a month...

Brilliant budgeting...

How about setting up separate bank or savings accounts for bills, food, Christmas and holidays? Pay different amounts in each month by standing order which will mean that whatever is left in your main bank account is for you and your family and it helps to budget over the year. So many times, people just use their finances from either their own accounts or a joint account and become unstuck because they don't budget for outgoings, simply see the cash in the account and spend unwisely.

There are bank accounts that are designed to help you manage your money and budget for your monthly outgoings. Have a look at http://www.thinkbanking.co.uk whose current account is basically two accounts in one – one for your regular outgoings (e.g. Direct Debits) and one for the money you’re free to spend on whatever you want once your outgoings have been covered. There are fees, but the budgeting facility could really help you keep on top of your monthly budget.

Britain has the highest cost of living in the western world according to a study by the Economic Research Institute, (Sept 08). So perhaps by using a simple budget each month, you would be surprised just how much money you could save.

Fixed Rate Mortgage?

If you are on a fixed mortgage rate that is coming to an end, make sure you contact your financial adviser so we can start looking for a new deal within three to four months of your current rate coming to an end. The chances are, if you fix, you'll end up on a higher rate than you are at the moment, so give yourself plenty of time so we can source the market for you for fixed or variable rate mortgages to suit your needs.

Working the numbers:

2 million is the predicted number of unemployed by the end of 2009

One in four is the number of people who think they are at risk of redundancy

Six out of ten employers are contemplating making redundancies

6,600 financial problems handled by the staff at the Citizens Advice Bureau each day

One fifth of Britain's entrepreneurs started their own businesses after redundancy
(Source: Times database, Sept 08)

As your mortgage is undoubtedly one of the largest financial commitments you will ever make, why is it that so many of us overlook the importance of Mortgage Payment Protection Insurance? You cannot legally take on a mortgage these days without purchasing buildings' insurance, yet we happily take on a mortgage debt without purchasing personal insurance. Can we ensure we can keep our home should something happen to us? Unemployment, accident, or sickness make a huge impact on family life and very often lead to mortgage arrears which in turn to lead to repossession of your home. Perhaps at the time we took on our mortgage, we didn't factor in the cost of this insurance? We keep the sky tv and the take out meals but won't take on a simple insurance that can start from as little as £3.01 a month (depending on the amount and type of cover you need) yet could support your mortgage payments.

How to survive stock market up and downs...

Even experienced stock market professionals can become unnerved by the ups and downs of the markets. One way to ride the stock market storm is to become focused on the bigger, longterm picture.

If we look at the notorious stock market crash ‛Black Monday' in 1987, millions of pounds were wiped off the value of equities but let's look at that day as part of the bigger picture... the graphs below show quite clearly that the Black Monday effect showed that the markets over 19 years have made a significant gain. It is prudent to say that not all past performance is a guide to future returns. However, it can be natural to become concerned with the day to day performance of the markets and make rash, panic decisions by selling off your investments thereby, locking in those losses. Patient investors have historically been rewarded by long-term stockmarket returns despite market volatility.

Keep focused on the bigger picture and give your investment objectives some perspective. Review your financial goals regularly with the end in mind. Diversifying your investments across equities, bonds and cash as well as world markets can help lower your overall investment risk and make for a smoother long-term ride.

For more information: unbiased.co.uk offers search results for local independent advisers

or visit www.maherbrownsword.co.uk

(Source: Invesco Perpetual Sept 08)

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

If you use an Independent Financial Adviser, there may be a fee for mortgage advice. The precise amount will depend on your circumstances.