Financial Advice Sought

bpk101

Hi — Where's the best place to look for some financial advice?

I earn a relatively okay London salary as a freelance creative but struggle to save once bills, mortgage and tax are paid.

I've never put anything towards a pension and my wife and I are expecting our first child in the summer so i'd like to start taking my finances a bit more seriously and could do with some help and advice.

I'm thinking some sort of financial advice, someone to help me budget properly and help me get a savings or investment plan together. As a freelancer i don't have access to this through a company like some of my friends do.

Where's the best place for me to start looking for advice?

Thanks.

lisyloo

I would suggest putting together a SOA (statement of affairs) and putting it on the dealing with debt board.
I know you are not dealing with debt but they are very good at looking at budgets.
No point looking at svings/investments or pensions (which you didn't mention) until you've budgeted.
I would say you should also be considering pensions and insurance in your plans (if you don't already have it).

bpk101

Thanks. Although isn't an SOA more to do with companies and their balance sheet rather than personal finances? I could be wrong.

badger09

bpk101 wrote: »

Thanks. Although isn't an SOA more to do with companies and their balance sheet rather than personal finances? I could be wrong.

This is the sort of SOA used over on the Debt free wannabe board. Definitely about personal finances, rather than company balance sheets

http://www.stoozing.com/calculator/soa.php

There is also lots of useful information on savings & budgeting over on the main MSE site

bowlhead99

bpk101 wrote: »

Thanks. Although isn't an SOA more to do with companies and their balance sheet rather than personal finances? I could be wrong.

Well, a company has a statement of financial position (balance sheet; assets and liabilities) a statement of comprehensive income (profit and loss and other related performance: revenue, expenses, other gains or losses), statement of cash flows etc.

Likewise an individual has incomes and expenditures coming in and out each month or quarter or year (like a profit and loss account) and an amount of cash and other assets, and outstanding bills and other liabilities - debts, mortgages credit cards (like a balance sheet).

On the debt-free wannabe and mortgage-free wannabe boards they usually standardise these as a statement of affairs to see what is coming in and going out and what could be set aside for the objective (which could be clearing mortgage or debt, or building up savings and investments effectively, etc)

tacpot12

I never learned about budgeting until I met my partner, she taught me to save regularly for the annual bills (house insurance, car tax, etc.) and for the unexpected items like vets bills and appliance replacements.

I did have a budget, but I managed everything within my current account, which didn't really work. What worked was getting a savings account that alllowed me to setup a number of 'pots'. I setup standing orders to pay money into these pots for all my annual and emergency expenses.

This has worked well for me for a number of years. I suggest you do the same for your regualr bills and emergency savings. Once you have this in hand, you need to look carefully at your expenses; your SOA will help you do this. If there is anything you can cut down, you and your wife need to make a decision: do we want to cut down on X, or be able to pay for Y?

With a baby on the way, you need to make sure that your income is protected, and that your wife is protected if you die. So you need some life insurance and income protection insurance (over and above anything you have for the mortgage). Life insurance, and to some extent, income protection insurance are cheaper when you are young. Income protection insurance is also cheaper if you can delay the point it starts paying out. Ideally, you will have a year of living expenses saved up, and can delay the income protection policy so that it starts after 52 weeks. This will keep the cost of this insurance to a minimum. So you need some spare income to start saving for this emergency fund and to pay for the insurance.

With these basic protections in place, you can consider saving/investing. You need to consider what your savings/investment goals are. I would suggest you save for the short and long term (i.e. retirement) at the same time. 50% of spare cash goes for short term saving so you can enjoy life and 50% goes on retirement saving so that you can live when you can no longer work.

Hope this helps; you don't need to pay for budgeting advice, just manage your money carefully. You go need a good insurance broker to help you find the best value insurance for your needs. Personally I would not prioritise critical illness insurance, but as a freelancer, this may be something that you might want to consider.

xylophone

Life insurance for both of you asap. I knew a couple whose mortgage was provided through the wife's employer - only she had life insurance.

The husband had a fatal fall.....

Income protection insurance.

Does your wife have pension provision through her employer?

Have you planned how to get by on one income until your wife returns to work?

Do you have the best bank account(s) for your situation?

https://www.pensionbee.com/pensions-explained/pension-types/self-employed-pensions?gclid=EAIaIQobChMI4ZDgprui4AIVbCrTCh1DcgArEAAYASAAEgKXwfD_BwE

LHW99

As you are expecting a child, family income insurance may be best (for a term say until your child is 18). You can choose to have it pay an annual income, which can be cheaper - less gets paid out as the policy get older, but by the same token you don't need the payout as long, if something happens to one of you when the child is say 14 (rather than aged 2).

Albermarle

I'm thinking some sort of financial advice

There is probably four or five types of financial advice available:
1) Man down the pub/colleague at work - not recommended
2) Going to see a financial advisor at your local bank/building society - normally only interested in selling one of heir own products but might point you in the right direction
3) A professional Independent Financial Advisor - probably more suitable for those with funds > £100K and expensive
4) Plenty of free info on google/govt websites and of course money saving expert - highly recommended::D

Wildsound

https://www.moneyadviceservice.org.uk/ - has a lot of useful generic guidance which can help you do a lot of stuff yourself, rather than pay for advice (especially on the basic stuff)

Also if you can get your head around spreadsheets, I would recommend doing budgeting through one of those. A useful exercise is to go through maybe 12 months of bank statements and categorise each piece of spending and gauge a pattern of what you're spending your money on, when, how often etc... you can then work out areas of spending that you can perhaps look to change.

bpk101

Thanks all, lots of good advice here... I’ll take a proper read through and plan my next steps.

ps: my wife has life insurance and pension through her company, I sadly have neither at the moment.