Let’s face it – everyone wants to have a solid financial plan that provides for their family and their future. But only 40% of people actually have one. The problem is that unless you develop a formal strategy for your finances – a bit like a written out plan – it can be very difficult to achieve any of the financial goals you might have set yourself. Like getting out of debt or buying a house. And let’s face it, if you do achieve a goal without a plan, it’s as much down to luck as it is to hard work. But if you’ve never engaged in any form of financial planning before, you might not know what that looks like. So today we’ve put together some of the basic steps you need to take to create a financial plan.

Define Your Goals

Before you can make any kind of plan, you need to know where you’re aiming for. What do you want your finances to do, what do you want to achieve, and can you create strategies to help you accomplish them. For example, you might want to build a savings fund for your children for university, to buy a house outright, or just to get out of debt. Whatever the goal is, write it down. Once you know what your short and long term goals are, it’s just a matter of creating a plan as to how you will get there.

Setting Up A Budget

There’s no getting around the fact that any type of financial planning is going to require creating surplus money in your finances. Whether your goal is to retire at a certain point your life, or to pay off your mortgage, you will need extra money in order to make any such goal a reality. This is why a budget is so important. A lot of people skip this step, and that’s the reason why they never accomplish any kind of meaningful financial goals. Putting together a budget means you know exactly how much money you spend each month compared to the amount of income you earn and use that information to do the following.

Cut Expenses

Putting together your budget should have thrown some light on areas you are currently wasting money, since you now know where it’s all going. So now you can go through and label the essential expenses and work your way down to the non-essentials. Things like entertainment, holidays, fast food, eating out and recreational shopping – which might be nice, but aren’t essential. Cutting these out opens up some cash flow, which you can now direct into savings and paying off debt.

Creating An Emergency Fund

Once you’ve identified significant expense cuts in your budget, the next order of business is to set up an emergency fund. This step is often ignored in favour of other goals that seem to be more dramatic, yet it is entirely a financial must have. An emergency fund is basically a savings account or money market that represents your liquid cash. The idea is to have it available when either an unexpected expense hits, or when there is an income disruption. That will not only enable you to weather a short-term financial storm but will also help you to avoid borrowing money for the same purpose. The general rule for an emergency fund is it should contain sufficient cash to cover 3 to 6 months’ worth of living expenses.

Getting Out Of Debt

Once you have an emergency fund with a good amount of cash in it, you can turn to what is many peoples pressing problem – debt. Debt is a very easy merry-go-round to get on, but can be very difficult to get off. The cash flow you created in your budget by cutting expenses (the money that was going into your emergency fund) can now go towards paying off your debt. There are a few methods you can use to do this, but we like the ‘debt snowball’ method. Here you make a list of all your debts, and you target the smallest debt and pay it off. Once that one is paid, you target the next smallest. Each debt that’s paid off, regardless of how small, is a victory, and can give you a big boost.

Saving For Retirement

Hopefully you’re already saving for your retirement, even if it’s just a little bit each month. But as you get out of debt, your cash flow begins to increase, which will ultimately enable you to save a lot more money for retirement, and for everything else. As is the case with every other financial goal, the most important step in saving for retirement is to get started. If you have not done so already, start contributing to a plan with an amount that does not significantly hurt your financial situation overall. Once you have that going, your goal should be to increase your contribution level each year.

Saving For Other Goals

Of course, retirement isn’t the only reason to save in life. There will be other things you want to do and goals you want to achieve – and you should have a plan in place for those too. For example, saving for a once-in-a-lifetime trip, for your children’s education or to buy a car outright to avoid going into debt. These are known as intermediate goals, and one of the best ways to save for them is to put a little bit away into a savings account each week. Make sure you know what it is you’re saving for and how much you need to make this effective.

Having Adequate Insurance

There are a whole bunch of contingencies you can’t possibly save enough money for, no matter how savvy you are. Luckily, that’s where insurance comes in. There are a wide variety of insurance types available that can cover you for pretty much anything, and the types you need will depend on your situation. This includes things like:

• Life insurance
• Health insurance
• Car insurance
• Home insurance
• Business insurance (if you’re self-employed, or own a business)

Along with the obvious benefits of each, these insurances protect your financial assets – which is why insurance is such a fundamental part of smart financial planning.

Setting Up A Will

This last one might seem a bit morbid, but the truth is that financial planning doesn’t end when you die. You need to make provisions for what will happen to your estate when you’re gone. Even if you’re young at the moment and still building up your estate, it’s important to create a will for what you do have, documenting your wishes. Over the years you will need to keep this updated but having a will in place of any form is better than nothing.

At Chilvester Financial, we love helping individuals of any age and situation start their financial planning journey. Our experts are on hand to help you with every element of your financial plans, from pensions and retirement options to savings, mortgaged and even getting the right insurance in place. If you would like to know more, or want to see if we could help you achieve your financial goals, just get in touch with the team today.

Every year, new and inventive scams are designed by criminals to steal your data. For a long time, such scams were mainly aimed at individuals, but now, the biggest targets for scams and fraud are small businesses. Because small businesses don’t usually have the infrastructure and policies in place to properly protect their physical and digital data, it makes them easy pickings for identity thieves and fraudsters who want to make a quick buck. So what are the biggest business scams we expect to see in 2020, and how can you recognise them?

Invoice Fraud

Invoice fraud is one of the biggest financial scams aimed at businesses, and it’s sadly increasing every year. Invoice fraud is when a scammer sends fake invoices to a business in an attempt to extract money from companies with vulnerabilities in their accounts payable processes. Invoice fraud isn’t one of those blind ‘try it and see’ hacking approaches you sometimes get – it’s something a hacker will have planned out in detail, from who they will be imitating to who they’re targeting. More often than not, they will have done research into their target company, choosing them based on size and location, and narrow down what suppliers they use regularly. From here, there are two approaches a hacker can take:

1. They can create and send fake invoices on behalf of the suppliers that look legitimate but have a different address or bank account details.
2. They can hack into that supplier’s accounting system, and simply change the bank account details on the invoices sent out from your business. This is a preferred route for many hackers, since the invoices will be genuine and expected, and less likely to be questioned. And even if it did seem dubious, only 8% of people actually take action if they receive a suspicious invoice.

After that, it’s just a case of waiting for the target to pay the invoice into the hackers account, rather than the suppliers. By the time the victims realise what’s happened, the hacker is long gone, along with their money.

Government Imitation Scams

There have been a lot of these going around recently, and impersonating the government seems to have become all the range. Scams are flooding the market from various ‘official government departments’ – from people impersonating the DVLA trying to make money through fake speeding fines to aggressive campaigns against business owners threatening legal action due to complaints about their practices. These messages can be scary – and that’s the point. But remember, these departments will never contact you by email, never threaten you in this way (they have other agencies to do that) and will always be in touch via letter several times before a ‘final notice’ is issued.

Investment Scams

According to UK Finance, the number of investment scams reported in 2019 rose by 152% compared to 2018. That’s a staggering number! Investment scams typically involve a criminal convincing a potential investor to part with money for a fake investment in assets like gold, wine, property or forestry schemes, or fictitious funds. If you are targeted by this kind of scam, you could stand to lose an average of £12,000. If you are being approached out of the blue, or you are being put under a lot of time pressure by an investment that looks too good to be true, it’s probably a scam.

Tech Support Scams

Tech support scams are also a very common problem, both for individuals and business owners. Criminals will pose as tech support personnel and request access to your computer systems to ‘fix an issue’. While this might sound ludicrous and obviously a scam, these people prey on the less digitally savvy. They threaten legal action if they don’t allow access to their computers, plant viruses to back up their fraudulent claims and repeatedly harass people they see as good marks. Make sure your employees never give control of their computer to anyone who calls from outside the company offering to fix something.

Pension Reviews

Since the change in Pension rules brought new pension freedoms, there has been a surge in the number of people falling victim to scams and losing their pension savings to criminals. Typically, these pension scams start with an unsolicited call, text or email promising a free pension review or a lucrative investment opportunity. In January 2019, a ban on cold-calling in relation to pensions came into force, but the current ban is unable to ban calls from overseas jurisdictions, which is how scammers are now getting through. Make sure you always discuss any changes to your pension with your financial adviser before taking any action.

If you have concerns about any of the above scams, or would like more information on how to protect yourself and your business, just get in touch with the team at Chilvester Financial today.

There are only 2 things that are certain in life – death and taxes. But while you can’t do too much about death, there are some things you can do during your life that will reduce the amount of tax you need to pay. There are a lot of ways to reduce your tax bill legally, whether you’re an employee, self-employed, a landlord, investor or even a pensioner. All it takes is a little effort to boost your take-home earnings and cut your tax bill. Today we wanted to talk through just a few of the options you have, strategies you might use, and how to take advantage of tax relief and government schemes you might not know about.

Check Your Tax Code

This is such a simple thing, but it can make a really big difference. Your tax code tells HMC how much tax to collect from your salary – and making sure it’s right is essential. You can find your tax code on your pay slip. Check it at least once a year, or after changing jobs, to make sure it’s right for your current situation. If you’re on the wrong tax code, you might be entitled to pay less tax in the coming months, or even receive a refund. You can find out what all the tax codes mean here.

Reclaim Overpaid Taxes

If you’re a non-taxpayer, or if your income has fallen unexpectedly during the course of a year, then you may have paid too much to HMRC. This is mainly because HMRC assumes your persona allowance is equally used each month, unless you tell them otherwise. If this applies to you, then you are entitled to claim any overpaid taxed back, giving you a nice little cash boost. And all you have to do to reclaim it is fill out form R40 from HMRC, or call them directly

Pay Into A Pension

Pensions are a great way to save for your future, but did you know it can also help reduce the tax bill? Contributions to your employer’s pension scheme (including any additional voluntary payments you make) can be made from your gross pay, before any tax is charged. On top of that, the government will top up your pension with tax relief, giving you a free bonus for your retirement savings. The exact amount you could save will depend on a few things, but pretty much everyone can save something. Our team can help you work out how much you could save, if you want to know more.

Maximise Your Personal Savings Allowance

Every year the government allows you to earn a certain amount of interest on your savings, completely tax-free. In 2019-20, that’s £1000 in interest, if you’re a basic-rate taxpayer. If you’re a higher-rate taxpayer, then the amount goes down to £500. This means you will only pay tax on any savings interest above this amount. But this is no longer automatically deducted by the savings provider – you have to pay it via self-assessment or have it deducted via PAYE. By moving money into savings if you’re under this £1000 interest earned normally, you can maximise the amount you earn without paying a penny more in tax.

Understand Tax Deductible Expenses For The Self-Employed

If you’re self-employed, then managing your taxes suddenly becomes a bit more complicated. And while there are a lot of options out there to reduce your tax bills, one of the best things you can do to reduce your (and your businesses) tax is understand what expenses can be deducted. When you look into it, many expenses incurred while running your business can be deducted from your profits, reducing your overall tax. This could include things like fuel, phone costs, or running costs for your home office. Take a look at a guide like this one to find out what you can deduct, and make sure you do!

At Chilvester Financial we understand that no one wants to pay more tax than they have to. Our financial advisors are on hand to ensure you’re in the best financial position possible, so you can enjoy your life and achieve your goals. Whether that’s understanding what your current position is, or knowing how to make the most of tax breaks, we provide advice plans and products that will help you get to where you want to be. If you want to find out more, just get in touch with us today.