Over recent years the landscape of personal finances has changed. Fundamentally. Forever. For the worse. For everyone… including you, your family and your loved ones. The evidence is overwhelming. And it is all around us…
•• Austerity means the state will provide less help than ever before •• Parents are being forced to act as “The Bank of Mum and Dad” •• The young are burdened with student debts of £27,000 for university tuition fees •• Parents must often contribute towards university living costs of £20-£30,000 •• Getting on the housing ladder is tougher than ever before •• New affordability rules mean it is harder than ever to get a mortgage •• Average first-time buyers must find £30,000 – with 78% needing help from their parents •• Interest rates must rise – making buying a home even more expensive •• The elderly are having their savings decimated by care fees of £30,000 a year •• The total amount of tax society pays will keep increasing – probably dramatically •• And all of this is against a backdrop where real wages have fallen, whilst the cost of living is more expensive than ever before •• An average wedding costs £24,000 •• The lifetime cost of having a child – ignoring university – is typically £218,000 •• Private education from 5-18 can easily cost £140,000 •• People are living longer – so retirement is going to cost more •• State pensions are certainly not generous – and are getting worse •• Many company pensions are not paying what they “promised” •• Personal pensions are a minefield •• Low pension annuity rates mean that even the best pensions pay less •• Pension reforms make it possible to catastrophically mess up previously watertight plans •• Low interest rates have decimated interest income from savings •• Increases in house prices can no longer be relied on to bail you out •• And there won’t be a nanny state to bail you out either
And the irrefutable fact of family life is that every single one of us must tackle these issues head on. Fully. And immediately. Because if you don’t, no-one else will. Indeed, no one else can. In other words, you owe it to everyone you love. And that means taking “Lifetime Financial Responsibility” for the money side of your affairs. Fully. And immediately.
We all owe it to everyone in our life In particular you owe it to: •• Yourself – so you can enjoy the happiness of being able to afford to live the life you want. •• Your partner – so they can be happy too. •• The generation above you – so they can enjoy the happiness of stress free later years, and the joy of being able to leave a legacy. •• The generation below you – so you can all enjoy the happiness that comes from giving your children a good start in life, and acting as their “Bank of Mum and Dad” when needed.
What can we do?
You must take Lifetime Financial Responsibility. And specifically that means:
1. Understanding your current situation 2. Understanding your future situation 3. Managing your income 4. Managing your spending 5. Managing your saving 6. Managing your assets 7. Managing your liabilities 8. Managing your risk 9. Managing your tax burden
If you can't take these actions or you don't know where to start, seek professional financial help.