Where To Begin

Before we ask you what plans you have for investment, take some time out to consider how you are using your current income.

Use the personal monthly budget to work out where you think your money goes now, using the ‘Actual’ column to record your income and outgoings over the coming month. Use the ‘Intended’ column to complete your budget reflecting any changes you anticipate making.

Next, think about your savings and assets – your home, investments, personal assets, and current savings – and your liabilities – your mortgage, credit card debts, and any other outstanding loans or bills. Use the personal balance sheet table to calculate your net personal worth. Once you have completed the tables you should have a clear picture of your current financial position, and of the areas where you might be spending more (or less) than you thought you were. You should also have some idea of the amount of money you can invest each month towards meeting your short-term, medium-term and longterm financial goals.

At this point you should look at your spending and debt pattern to see if any changes are possible. For example, better budgetary control might mean you can pay off some of those credit card debts, saving the monthly interest cost and making more income available for saving.

Finally, it may be that you have other items to take into account in estimating your total net worth.

  • If you are in business you should add the value of the business, or your interest in it. (We can help here by providing a valuation if you wish)
  • You should also add the value of anticipated inheritances and other items such as trust funds

You should now have a clearer picture of how much capital and income you can count on as you develop your personal financial plan.