How can I prepare for the future?
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“A lot about preparing for the future is in understanding the present. You should know exactly what your income is and try to live within it,” Black says. His top tip for making this happen is to set up separate bills accounts for all of your direct debits and for your regular payments. Each time you get paid, transfer enough to pay all of the bills plus a little bit extra into the second account.
Yvonne Goodwin of Yvonne Goodwin Wealth Management agrees. “Before anyone starts saving they should firstly work out their budget and what they have to spend in order of priority (mortgage, utilities, council tax etc). You can then work out what you need to earn in order to fund your desired lifestyle and if there isn’t enough, then what are you going to do about it?”
If you are already living within your means, that doesn’t mean you should rest on your laurels—Goodwin advises looking at building up an emergency fund. From 6th April you will be able to put £5,100 a year into a cash ISA, where the interest you earn is tax free, making it an attractive option for savings. She also advocates transferring money to this fund on a monthly basis as soon as you start to earn, and as soon as your first pay packet hits your bank account. “If you haven’t had it before," says Goodwin, "you won’t miss it."