How financially organised are you?

John (not his real name) came into us recently and is a typical client we would see. He’s a 36-year-old newly engaged man living in his own mortgaged home in Clare. He works full time in a PAYE role. John is not sure whether he has handled his money and investments right over the past 10 years. For one, he feels he is still not in control of his financial situation. He has a mixture of long term and short-term debt, a defined contribution pension through his employer and some very small savings.
He has been trying to bring some order into the way his finances are managed before he gets married. He knows there should be a system in place for it to be effective. He wants to know what he can do to get his financial affairs in order.

John needs to organise his money matters and put in place a schedule for reviewing his financial decisions to get the control he seeks.
To start with, he should divide his financial affairs into three categories:

1. Investments
2. Insurance—life, car, health and other covers
3. Financial services, including banking, credit cards and loans, among others

The next step would be to schedule periodic reviews for each of these so that he can ensure that they meet his requirements. Sometimes we find that clients are paying for financial products they don’t even need, so a complete review may save you money.
While reviewing his investments, John should focus on evaluating their performance and suitability to his current needs for income, growth and liquidity. Based on this, he can decide whether he wants to remain invested, exit or increase the holdings.
This exercise needs to be done once a year unless it is a short-term investment. Investments also include his pension which is the single most important investment we all need to make.
He has a pension through his current employer but actually isn’t sure how much he pays into it. He needs to review this, preferable with a trusted financial advisor. He thinks he has a pension from his previous employer where he left 6 years ago.
John needs to source an old payslip which will tell him if he was paying into a pension. He can then contact the provider to establish his policy valuation and ownership. This might be a nice windfall!
For his insurance needs, John should make sure he is adequately covered and review this every time there is a milestone in his life. These would include marriage, children, taking on liabilities such as home loans, a promotion with increase in income or reduced obligations, such as an ‘empty nest’. He can increase or decrease his insurance according to these milestones. Also, John’s ability to manage his affairs well will depend upon how easily and efficiently he conducts his financial transactions. This could cover life, income and illness protection as well as the more mainstream personal insurance services like car, home and travel.
Another great way for John to manage his money matters would be to keep the related paperwork current and organised.
In fact, one of the easiest things John can do to help keep his financial house in order is to get organised. Having his financial information stored and processed in a systematic manner will go a long way in helping maintain his finances.
This will help him eliminate outdated documents and statements that are not required to be maintained. Having a system in place will allow John greater control to manage his financial affairs. If John deals with his bills and bank accounts online then printing out some copies will help. It’s also a good idea to make a list of regular payments that will need to be renewed.

For example, subscriptions he might have to:

• Magazines
• Societies or clubs
• Breakdown services, or
• Donations to charities.
• Digital entertainment service, like Netflix

Get some help in case you need it. Financial brokers over all aspects of financial planning. A good financial broker is like a good dentist, helps you avoid problems before you even know they exist. An annual review is essential.
Identity theft has become a big problem in recent years. Thieves can take bits and pieces of his personal and financial history and use it to create fake identities that can ruin his credit, drain his bank accounts, and otherwise give him a major headache. So, it’s important that he protects and dispose of his financial data properly.
First of all, John should consider buying a paper shredder for his home. All of those old utility bills and even unused credit card offers he gets in the mail each month can be prime targets for thieves. By shredding his unused documents, he can be sure that he has minimised the chances of someone stealing the information.
It also means he should secure the documents John keeps in the house. If he just stores everything in cardboard boxes in the basement/attic what happens if there’s a flood? Years of data could be lost. The same thing goes if there’s a fire or other disaster. Same goes for digital storage.
While John can’t protect against every single possibility, he can at least get a strong, sturdy, and possibly even fireproof filing cabinet or locking container that will keep his documents relatively safe and out of the wrong hands. He doesn’t need to go overboard, but he also doesn’t want everything just sitting around in a few old shoe boxes in his spare room, either.
Now that John is getting married and may have children, he needs to think about more than himself. If something happens to John, the organised financial documents can tremendously help those who will be taking care of his affairs after he is gone. It can streamline the settling of his estate. If he has a will, it is also important to have a letter of instruction so that the executor knows where to find these documents.
Sorting out his finances in advance can be a really big help to people left behind and ensures you have the best financial products for John’s needs – and it doesn’t need to be a big job.

Contact Carey Corbett Financial Solutions today for an appointment to discuss your own personal finances on 065-6893540