Tag Archive: Financially organised

  1. Christmas markets aren’t the only ones to watch

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    If you started getting financially organised this year, then you should have set yourself some outcomes in January. The Money Plan is a book and a system I created to getting people on track, which includes splitting the year into quarters where you can ‘check in’ to assess your progress towards your goals.

    By Q4, those following the plan will have financial foundations in place, including a will, lasting power of attorney and an emergency reserve of cash. Some people will be in the phase of paying down their debt; others will be considering investments and saving for the future, which often means investing in the stock markets.

    The markets have been very volatile lately. There are two main reasons for that: first is the uncertainty caused by events around the world, from the trade stand-off between the US and China, Brexit and its impact on Europe, and the mid-term elections in America

    The stock-market is a forward-thinking machine and because politicians don’t know what the outcomes of these and other events will be, the market doesn’t know either. That causes concern, and prices go up and down accordingly.

    The second reason for the volatility is the widespread rise in interest rates globally, which among other things is causing companies to pay more when they’re looking to borrow to grow.

    My feeling is that we’ll continue to see volatility as we move into and through 2019, with neither of the reasons above going away anytime soon.

    People can get nervous about investing when the market is fluctuating, but it’s important to remember that when you’re investing you should be in a long-term mindset – preferably at least seven years or more and it’s important you have a future vision, a reason why you’re investing in the first place.

    You can reduce your risk by investing in instalments. If you’re investing on a monthly basis rather than with a lump sum, you’re doing what’s called pound cost averaging. By investing at regular intervals, in a volatile market you’ll be purchasing more shares when prices are lower and fewer shares when prices are higher. If the markets do fall then pound cost averaging is advantageous.

    So should you wait? The numbers say not.

    The long-term return of the FTSE All Share is around 9.5% per annum on average. I’d always recommend people diversify globally, buying into collective investment funds around the world, which may also add a further premium to that figure.

    The current returns on deposits and savings is somewhere around 1.5% at best. Although if you invested in the market now you might see it fall in the short-term, you shouldn’t be investing for three, six or 12 months; you should be investing for five to seven or more years.

    Put simply, you’ll never be able to predict where the market is in terms of buying in at the bottom. That’s why we have an adage in financial planning: the best time to invest in the market was yesterday. The longer you’re in the market, the better your experience will be.

    If you’re investing a chunk of money which is considerable to you and you’d feel nervous if it quickly fell in value, then phase the money in over six months, a year or longer if you need to. This way you’ll take advantage of pound cost averaging, but if the markets do rise, you’ll just have to put it down to a learning experience.

    Academic research proves that pound cost averaging isn’t the optimal way to invest over the long-term, because most of the time the market is going up so you’d be better off putting your lump sum into the market in one go. But I’m a big believer in psychology and if you’re going to lose sleep at night, it’s not worth it – phase your money in over time and you’ll feel better about your investment experience.

    Warren Shute MSc. is a multi-award winning Certified Financial Planner and author of the bestselling personal finance book The Money Plan available on Amazon for £11.79.

  2. Financial Clarity

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    Getting financially organised is important, because clarity is power. When you know your numbers, your finances are not as complicated as you might think. Clarity gives you the enthusiasm to make better decisions and live the life you want to live.

    To get started, put your income at the top of a spreadsheet and then list out each of your expenditure items that are on your bank statements. Having things written down means you can come back to your numbers once a quarter, check what’s happening and make any changes needed.

    Our income can come from several different sources, not necessarily just a salary, so getting organised means considering everything.


    There are three main types of pension: defined benefit (final salary), defined contribution, and the state pension. Pensions can seem complicated, but they’re much less so if you have your information to hand. Clarity is power!

    If you’re a current member of a defined benefit or defined contribution pension, you should receive a statement every year. If you’ve left the scheme because you’ve changed job, they may not send you statements, so you’ll have to contact them for a statement projecting what your pension will be. You should make time every year to do this as part of keeping your finances in order.

    To get a projection on your likely state pension, you need to fill out a BR19 form with the Department for Work and Pensions. You can do this online, or you can request a form and fill out a hard copy, which takes typically around two weeks to come back to you with your information completed.

    Your forecast will show you what you’ll receive if you carry on working until retirement age, as well as what you’ve accrued to date – so if you were never to work again, it will show you what you’d receive. If you’re close to retirement age, the numbers will be similar.


    If you’ve been investing for a while, you may well have capital held with different providers, stockbrokers or accounts. You should contact each of them, asking for current and transfer valuations, which you can add to your spreadsheet.

    If you have unsecured debt like loans or credit cards, you should consider whether to pay those off before investing further, to free up disposable income.

    For most people, putting money into a pension rather than an ISA or other investment vehicle is a more efficient way of saving; a caveat to that is if you’ve earmarked the money to use before retirement.


    One of the most common questions I’m asked by small business owners is, ‘How can I plan ahead when my income is variable?’ In a seasonal business for example, those variations can be significant. It comes down to having enough capital in the business to draw a fixed income from it.

    Look at your business income and expenditure and put together a 12-month cash flow (I prefer a 36-month cash flow, but one year at least gets you started) which predicts how much money is going to come in and go out every month.

    While your income might be variable now, a lot of your expenditure isn’t – office rent, wages, vehicle lease and so on are fixed costs. By looking at things over a year or more and seeing whether you’ll have a deficit or a surplus every month, you can work out the amount of money you need in the business to ensure positive cash flow.

    Once you know your numbers, you might need to put a lump-sum into the business to be able to take a consistent monthly income from it. But doing so means that when it comes to your personal finances, you’ve got a predictable, regular payment coming in, and a better opportunity to plan.


    On my website warrenshute.com you’ll find a spreadsheet which will help you organise your unsecured debt, with tips on using my snowball system to pay it off. This differs from simply arranging your debts in order of interest rate, because for me the psychology behind getting out of debt is so important.

    The snowball system gives you a series of wins as you pay down your debt, keeping you motivated and energised to keep pushing forwards.

    To get started on the snowball, or any other kind of plan for paying off your debt, find out your interest rate, your current balance and minimum payment for each card or loan: once you have this information you can attack the debt.

    You don’t have to pay it off by Christmas or even in the next year, it’s a journey. What you do have to do is stop using cards and loans, put a strategy in place to pay them off over time, and enjoy the process of getting debt-free.

    The time to act is now!

    With only weeks of the year remaining, this is the perfect time to set yourself up to get organised. If you’re feeling out of control financially, then get on board with the 100-day Christmas Money Plan.

    The plan is a series of simple steps in the build up to the big day to help you enjoy your festive fun without the financial fret. It started in late September but there’s plenty of time to catch up, just search on warrenshute.com to find everything you need.

    If you’re worrying about your money then stop using your credit cards, even if it means having a different kind of Christmas this year. You’ll be much happier and ready to transform your finances in 2019.

    Warren Shute was named UK Certified Financial Planner of the Year. His bestselling personal finance book The Money Plan is available on Amazon.