Financial planning for all eventualities

Monday, 30 July 2012

One thing that doesn’t seem to change, regardless of age, is the potential for things – good and bad – to sneak up on us. This will often leave us wondering about how to deal with the situation most effectively. The old advice of 'expect the unexpected' remains something that we should all bear in mind, especially when it comes to our financial planning.

Here are some ideas that can help to remove some of the stress from dealing with an unexpected problem, whether it is a problematic boiler or something more serious relating to your health.

A great way to build up a little nest egg is by using an ISA (Individual Savings Account), available to residents of the UK. You can invest money in either cash or stocks and shares formats (or a mixture of both) and receive benefits that are not subjected to income tax or capital gains tax. As there is no restriction on when you can withdraw money or how much, it’s the perfect solution as a rainy day fund that is available to you whenever you might need it. For the tax year 2012/2013, you can invest up to a total limit of £11,280 and £5,640 of that can be in cash.

Another method to give peace of mind for the very worst kind of eventuality is to make sure that you have the necessary life insurance cover that you might need. This is an essential part of being able to guarantee the future wellbeing of your family and loved ones if the worst should happen. In the modern day it’s extremely easy to find all the information you need to make a choice regarding such a policy, with online portals such as comparethemarket.com giving simple and straightforward information presented in a clear and concise manner. A recently redesigned quote process makes it even easier to find the right details to fit your own unique situation and set of personal circumstances.

Another way of having instant access to funds in order to cover the costs of unexpected outlays has been much maligned in recent years, but that is mainly due to misuse rather than a problem with the product itself. Credit cards are a perfect way to secure back-up funds that can be used as and when needed. As long as you treat them in the way you would sensibly treat any other financial product, they are a perfectly legitimate means of financial assistance. Again, the best deals can be found with a little research online, and if you've got a good credit history you’ll be able to find some good deals that won't cost you anything in monthly charges and won't even necessarily cost you money in interest charges if you need to use them, as long as you pay the amount off in full at the due date.