Foundation
This section is the framework for everything. These are the chores you must undertake before considering investing, and the habits you should encourage when you decide to do so.
Before you start
The web is stuffed with financial advice. The government itself supports a financial advice website - MoneyHelper - which is good in parts but careful not to offend any commercial interests.
But what it does is answer your questions. What it doesn't do is give you - an intelligent person too busy or uninterested to learn how to manage your money - a pathway to lifetime personal money management. If you like, it doesn't tell you what questions to ask. That's what we do.
We assume you are intelligent but financially ignorant. Please don't be offended.
Here's a plan
Do these five things and you are most of the way there:
1) Protect yourself and your family from catastrophic loss
This means: insure against those events that you just cannot cope with.
2) Repay high-cost debt
This certainly means all credit card debt, and almost certainly means all debt except your mortgage.
3) Build a cash cushion
You need some cash for emergencies. Or access to cash, which is just as good.
4) Secure your own home
Rent or buy? Buy now or later? These are big decisions you can't avoid.
5) Consider repaying your mortgage
It's complicated!
The links at the ends of each page will take you through them: Protection, Handling Debts, Cash Cushion, Securing your home, Repaying your Mortgage
And you must do them before you get to the tricky bit.
What's the tricky bit?
- You have to prepare for the future, and that includes when you no longer have earning power - sometimes called 'old age'.
- You have to invest your savings, if you are lucky enough to have any.
You do both these things by learning the three features of financial life for the financially successful: saving, investing and planning.
'Saving' is.....
....what happens when you spend less than you earn.
'Investing' is......
......what you do with your savings.
'Planning' is.....
A process of balancing your lifestyle and your work habits and expectations against your financial needs for the rest of your life to come to the best compromise for you.
What next?
Follow the eight steps of the Foundation. The first five steps we have already described. After that, even if you are not yet a saver, look at the three steps of Saving, Investing and Planning. A ninth step, Life and Work, encourages you to view money within the wider context of life and prepares you for simple investing. At your own pace, over the next year or two, follow those steps and use the advice to reach your own conclusions about how you want to influence your financial future.