When money is no object and income flows freely into your bank account by the day, it can be easy to assume that you’ll never have to worry about your finances – but while that might well be true, it doesn’t mean there aren’t certain measures that can be put into place to make your financial future more secure. Sometimes, life can take some unexpected twists and turns – and it always pays to be prepared.
If you have a family to look after, then financial planning will ensure that they are looked after when they need it – and from tax-free gifts to trust funds, there are plenty of ways to keep them safe, secure and set up for the future, too. Without maximising the opportunities available, your money could end up being dispersed in other ways to pay tax bills and care costs in the event of your illness or passing, so be sure to consider all eventualities early on, and you’ll be glad of it later.
According to halvinlaina.fi, these are some of the best ways to set yourself and your family up for a prosperous future, in 2022 and beyond – and most of them can be implemented in just a few minutes.
Create a cash flow plan
When money is in plentiful supply, it can be easy to let keeping track of the pennies slip – especially when it comes to the small stuff. But long-term, a cash flow plan is essential to protect and retain your wealth and will bring together all of your assets, income and expenditure into one place. Acting like a personal balance sheet, it’s a great tool for determining what proportion of your money you’d like to invest, as well as forecasting financial sustainability for the future and post-retirement.
It isn’t a case of ‘one and done’ – cashflow plans need to be updated regularly to reflect changing circumstances and income streams. So start by creating a basic plan, and revisit it monthly to ensure you’re staying on top of things.
Prioritise your pension
State pensions leave a lot to be desired and, alone, are not sufficient to set you up for a prosperous future. Workplace pensions are often a better bet – enquire into the maximum amount your employer can contribute on your behalf, and make this a priority. If you can further raise your own contributions and have your company match them, then even better.
Of course, private pensions allow you to stash away as much of your own money as you like and will provide a much greater level of financial security long-term. It’s easy to assume that your current fortune will last forever, but things can change unexpectedly – so secure your future now, and you’ll thank yourself for it later.
Set children up for the future
If you’re eager to ensure that your children are provided for and are set up for a prosperous future of their own, then creating a tax-efficient fund is a great way to enhance the investment return. Junior ISAs offer tax-free income and growth, and you can even establish a pension for your child to take advantage of immediate income tax relief on the contribution, as well as further tax-free growth for the future. If your children are still young, then you’ll thank yourself for it later – and they certainly will, too.
If you’d like to support a child that isn’t your own offspring – for example, a grandchild, niece or nephew – then trust funds are another great option and can be used for expenses like the payment of school and university fees later on. When creating this type of fund, the money is considered to belong to the child themselves for tax purposes, so they can maximise personal tax allowances and exemptions.
Take out life assurance
Unlike life insurance, life assurance will cover you for your entire life as opposed to a certain term, so once you have it, you’re good to go. Although it won’t reduce your potential inheritance tax liability, it will still provide your beneficiaries with the funds needed to pay it, ultimately ensuring that your assets won’t need to be liquidated in the event of your passing to cover the bill.
Of course, you’ll still need to pay monthly premiums for the cover, but it’s one of the best things you can possibly do to protect your family in the event of your passing and ensure that they are financially secure for the future. It might seem like one of the more tedious tasks on your ‘to do’ list, but it’s also one of the most important.