5 steps towards a successful financial future

With a few basic steps you can plan for a better financial future.

By Nicole Hamer |

11:14 02 May 2013

With the announcement that the UK is in an economic depression, people will most likely be paying a lot more attention to their own finances with the intent of ensuring a successful financial future.

 

There are a few ways to ensure a more stable economic situation:

 

• Set a budget—this is the first and most important part step.  The ideal way to analyze your budget is to ensure that your monthly expenses don’t exceed your income. You’ll want to have extra cash for car repairs, clothing, unexpected illness, and other expenses. Neglecting those little items can jeopardize the chances of a successful financial future.

 

• Payment Protection Insurance—if you’ve invested in larger purchases or have loans which need to be paid on a regular basis, then you’ll want to consider this type of protection if your employment status makes you eligible to receive benefits (i.e. not a contract worker, unemployed, or self-employed).

 

• Establish a savings account—part of having a successful financial future will be taking that monthly extra and putting it in a savings account. It’s easy to spend extra money, but then you find yourself in the same situation when a crisis comes around, especially if you already have a tight budget.

 

• Consider investments—most people think strictly of the stock market when they think of investing, but there are other ways to earn a return on your money depending on your resources as how comfortable you are with risk. Cash ISAs offer a stable way to earn extra money on amounts you set aside, but if you have more to work with, consider investing in a legitimate start-up that may give you a nice return.

 

• Children—if you have children, plan for their successful financial future by starting them off with Junior Cash ISAs or Junior Stocks and Shares ISAs, or one of each. These have an annual cap for the amount that can be deposited, but provides a great way to ensure your kids will have something when they go to university.