There are certain events in everyone’s life which are of substantial importance and have consequences on finances. Events like getting married, starting a family, or retiring needs financial planning and strategic decision making. These events if planned properly will lead to a smooth life with less obstacles and if planned poorly can push anyone in a never-ending cycle of debt and financial stress. Foreseeing and planning each aspect of these events is the key in sailing through these events and enjoying these phases of life.

 

Financial Considerations for Marriage:

Combining Finances: It is commonly used phrase marriage is beginning of a new phase in life well it is true at least in the financial sense. Planning for marriage should be done way before the event as marriage brings new financial responsibilities and liabilities as well. For example, after getting married it is a very common scenario that you would be needing a new place to live to accommodate your better half, you would be planning a vacation, some people prefer to get new car or even a buy a new place. In order to tackle these responsibilities planning must be done advance and merging finances can be a great solution for the future expenses like planning a child, getting a dream house or moving to a different state or country. Finances can be merged by merging saving accounts, investments accounts and creating new accounts for common financial goals.

Budgeting for the Wedding: Weddings can definitely leave a mark on your finances if you do not plan them well. It is really important to create a practically achievable budget for the wedding and off course stick to it. Expenses must be prioritized and cost saving should be done where you can save the money. For example, decorations can be optimized, wedding dates can be planned to off season which will give huge cost benefits and negotiations must be done with various vendors like for food, liquor, beverages etc.

Understanding Legal and Tax Implications: Change in marital status can bring changes in taxes, legal rights and even inheritance. You must be aware of the changes that getting married can bring for your income tax allowances, inheritance tax exemptions and pension rights so that you can plan and create an action plan to tackle these changes in advance.

Reviewing Insurance Coverage: Insurances must be reviewed after marriage to include the new beneficiaries and mostly importantly to review the coverage levels for your various insurances like health insurance, life insurance and home insurance. This is the most important decision after marriage as it is regarding the protection of your partner’s health and future.

 

Financial Considerations for Parenthood:

Budgeting for Childcare Costs: Raising kids comes with personal responsibilities along with financial ones including nursery care, babysitting, healthcare, nutrition and education. Budgeting in advance and finding government schemes for tax free childcare and education will help in child’s future costs like higher education and career expenses. 

Saving for Education: Starting early to plan for education of your kids can really help in shaping up your child’s future. You can always start up with saving early using Junior Savings Account (ISA) or can set up a separate savings account as well. Careful planning can take care of future education related expenses like tuition fees, accommodation costs, university fees etc.

Reviewing Life Insurance and Estate Planning: One of the important responsibilities that comes with becoming a parent is making sure that your child and spouse are protected financially even in case of your demise. It sounds like an event which is unlikely to happen to most people but it is really important as failing to cover this event can put the future of your child in risk. Starting early in making extra investments for security of your child and spouse will them a freedom to explore their life and follow their dreams even if you are not there. Estate planning should be done to make sure that your family does not have to work from the scratch to buy a place to live and will spend a substantial part of their lives in dealing with mortgages.

Investing for the Future: Just imagine that your child is secured enough to follow his passions and dreams. Imagine your child does not have to grind endlessly in a job which he does not like to gather funds to start his own business or follow his passion. College educations these days costs a fortune and it becomes really important to start early to plan for your kid’s education. Investment options like child trust funds, junior ISAs, and long-term individual investment accounts will make sure that future of child is secured.

 

Financial Considerations for Retirement:

Setting Retirement Goals: Setting retirement goals should be a priority for every working professional because time waits for no one and no one can work throughout their life. It is however desired to be active during the later part of your life but that should be work it should be travelling, spending time with your kids and grandkids. To ensure that you enjoy your fifties and sixties you should create a retirement plan for yourself and for that setting clear retirement goals is very important. Your retirement goals should be clearly defined like the retirement age, lifestyle preference, and financial needs for retirement. Your goals should consider how much amount you will need to maintain your desired standard of living.

Contributing to Retirement Accounts: Once you have established your goals for retirement the very next step should be to quantify how much you should be contributing to retirement accounts like workplace pension plan, personal pension plan and self-invested personal pension plan. Maximizing the contribution according to growth potential is the key to get most out of your contributions.

Diversifying Investments: While investing for the retirement diversifying your investment must be done in order to safeguard your investments to minimize risk and reduce the volatility of your assets. You can diversify your retirement investments easily by distributing the invested amount in various asset classes like stocks, bonds, real estate to mitigate the risk of loss of investment in any one asset class.

Planning for Healthcare Costs:  As we age our healthcare expenses increase due to need of constants health check-ups, treatment of any chronic conditions and any emergency medical needs. If anyone is planning for retirement must take these factors into consideration as these expenses can impact the savings for retirement. Hence it is very important to consider private health insurance, long-term care insurances and funding for emergencies while planning for retirement.

Every stage of life comes with challenges which can be personal, financial, medical etc. wise people are always ready because they plan in advance for any circumstance may it be expected or unexpected. If you have planned in advance for each stage of your life you would be focusing on other important aspects and will not just go through life but you will grow through life.

Being financially free is the goal of any kind of financial planning and financial freedom refers to a financial state where you have enough money to survive without working or you have either accomplished your financial goals. Now to grow wealth or achieve your financial goals you need to make some investments which must give you expected results as per your goals. With right information and effective implementation anyone can get desired outputs from their investments.

Before going further into the various aspects of investing let us understand what basically is the meaning of investment. The word investment simply means act of putting time, money or any asset into use with an expected growth or advantage in future. Now if we apply logical thinking to the process of investment some fundamental questions must be asked to be sure that we are making the right call for investment. These questions are just simply common question that anyone would ask if we are investing their money for an example what is the risk involved, what is the expected return, how the funds would be diversified, for what time the amount should be invested in order to get the expected return.

Understanding the Basic aspects of Investing:

Risk and Return: Every investment is associated with some kind of risk associated with it if there is reward expected out of it. Let us take an example of a tech company which has recently launched its IPO and is looking very promising, there is definitely a huge reward expected out of it but if you look carefully there is a risk associated with this investment as the company or even the technology can completely go south in near future. So, the more promising an investment sound greater are the chances of losing money as well.

Diversification: In the investment domain going all in on one stock or on one investment in terms of funds is actually considered as risky and immature behaviour. The expression never put your eggs in one basket is taken really seriously in investing. Wise investors prefer to diversify their capital into different investments like real estate, stocks, bonds etc. in order to give themselves a cushion against the loss in any particular investment. In simple words diversifying your investment acts as a loss mitigating mechanism for your portfolio.

Time Horizon: It is simply the amount of time for which the investment is hold before the funds are accessed as per the desired output. No one can deny the role of timing in investment any individual interested in investment just want to know when to invest in a business and when to exit with the profit.

 

Key Investment Options for UK Investors:

Stocks and Shares: Someone has to be really living under a rock if they have not heard about the investment option of shares and shares. In context of United Kingdom London Stock Exchange is the place where the real magic happens in terms of trading of stocks and shares. Stocks in very layman terms represents the ownership in shares in Publicly traded company. Without any doubt you can say that there is a lot of potential of growth if investor is strategic and systematic. However, there is also a relatedly higher risk for this mode of investment.

Bonds: Corporations use bonds which are basically the debt securities issued by government to raise money for themselves. In United Kingdom these bonds are called gilts and these are available for the investors. Bonds are usually a safer investment option for people who do not have a greater risk capacity.

Property: If something is limited and is of prime utility for people its value is bound to increase in future and one such resource is land or property. We all know that population is increasing and with increase the demand of real estate in growing faster than ever. Real estate will always be a great area for investment whether it is commercial or residential. People make real estate investments mainly for two reasons first being to generate a passive income source by renting the property and secondly to get the gains in the future by selling of the property. In United Kingdom investors can invest in the residential or commercial property directly by purchasing the property or indirectly by getting real estate investment trust or property funds.

Cash and Cash Equivalents: These are simply the investments where you put your cash and get increment on the principal invested, these provide better safety and liquidity but the returns are typically low as compared to other investments like shares, stocks etc. Savings accounts, money market funds and government bonds for the short term are example of cash equivalents. These investments can be considered as slow and steady investment options best suited for people with low-risk appetite and larger time frames to let the investment grow. 

Mutual Funds and Exchange-Traded Funds (ETFs):  If you are someone who is not from the finance background and want to create an excellent portfolio which has various asset classes and is diverse as well to reduce the risk of market fluctuations mutual funds is the best choice for you. Many banks and financial institutions have teams of seasoned professionals dedicated to one goal make your investments grow with minimum risk. This is the best investment instrument for people who want experts to take care of their investments.

 

Essential Tips for UK Investors:

Set Clear Investment Goals: Your investment goals must be clearly defined in terms of objective, time horizon and risk level before you even decide to make any investment. You simply need to ask yourself how much you want out of the investment, in how much time and how much of your investment you are willing to risk for the goal. People have goals like retirement savings, creating a certain amount of money, education, marriage etc. Clarity is the first requirement that will enable you create an investment plan for you.

Diversify Your Portfolio: Never put all your eggs in one basket when it comes to investment which means that you must spread your investment in various assets, industries and geographic areas to minimize the risk and maximize returns. Diversification minimizes the risk of market volatility and specific investment loss risk.

Start Investing Early and Regularly: Ever heard the expression early bird catches the worm it applies perfectly in investing. If you start investing early in your life you will be able to take the maximum advantage of compounding to maximize your returns as you are investing for a longer time as compared to others. So, the mantra here is start early and be consistent in your investments.

Educate Yourself: Everyone must have a basic level of financial knowledge in order to live their well financially. We all are working for money and it would be extremely beneficial if we understand money. In case of investing everyone should be updated with the latest developments and current market dynamics around them. An intelligent investor is more likely to make money as compared to someone who doesn’t have a clue what he is doing. Investing time in learning about investment options, strategies and market dynamics really pays off. Resources like books, online courses, websites, blogs can help you in transforming yourself in to an informed investor.

Seek Professional Advice When Needed: Taking professional help for the financial decisions really pays a lot consider a scenario that there is new organization which is working on an emerging technology and you do not know about it. Just thing of the potential loss if you invest without asking a professional in some company or shares which will rise slowly other than this new firm working on new tech. Taking advice from people in finance domain really pays in making investing decisions.

Investing is long term endeavour which requires patience, discipline and a mindset to learn forever. By knowing the ways to invest, where to invest and when to exit your investments anyone can make their financial dreams come true. All it takes is a learning attitude, perseverance and dedication towards your goals to make it big.

People usually link the word retirement with age and that is where most people suffer, retirement is actually the stage when you have enough capital to do whatever you want for the remaining part of your life. The word retirement should be understood as a desired state of your life where you have actually achieved financial freedom which means you are secured financially for the remaining part of your life. It should be understood as the point where you have enough recurring returns from your savings and investments that you do not have worry about money for the remaining part of life. Retirement age can be different for different people depending on how much they are willing to save for it and how early in life they make this decision.

A basic know how about various pensions schemes like state pensions, workplace pension, personal pension and self-invested pension helps in deciding where you should put your money to plan your retirement.

State Pension:

State pension as the name implies is a pension plan given by government. People require at least contribution of 10 years towards National Insurance to be eligible to get a pension while the contribution time of 35 years is the requirement to get a full state pension. Present age for pension is 66 years, however there are talks to increase it to 67 in future. Online facility is also available for the people to check and estimate the amount they are entitled to along with the plan in which they are enrolled. 

Workplace Pensions:

As the name suggests these are the pension plans where you are automatically enrolled in a pension plan by your employer and you start contributing towards your pension with each pay check. These pension plans do help employees as the employer also contributes towards the amount of your pension. Tax benefits are an add on along with the employer contribution. People enrolled in the workplace pension plans have an advantage of investment funds where your contributions are invested so that employees’ contributions can grow till retirement.

Personal Pensions:

In simple words these are basically the pension schemes in which people enrol themselves as per their needs like contribution per month, investment choices and age at which you want to retire. These are usually provided by the financial institutions and can be tailored according to requirement of the customer. Along with the ability to be customized these plans do provide tax relief as well up to a certain level of contribution. People who want an early retirement prefer as they can increase the contribution level and also opt for the investment choices given by the provider to maximize the returns on their contributions at the age of retirement. 

Self-Invested Personal Pensions (SIPPs):

These are just a type of personal pension that provides customers with a wider range of options for investing the contribution in stocks, bonds, mutual funds and real estate etc. in order to maximize the growth potential of the contribution made by the customers. These are again best suited for the people looking to take more control of their contributions and want to increase the growth of their contributions. However, there is a risk associated with these pension plans as the contributions are invested in various investment products, hence a proper monitoring and management is required for these funds.

 

Considerations for Pension Planning:

Contribution Levels: It is simple you will get the amount of money accumulated according to what you have contributed towards your pension plan. Hence it is very important to contribute a decent amount in order to increase your retirement savings. An employer’s pension plan is recommended in order to get the benefit of employer’s contribution and tax savings.

Investment Strategy: If you are opting for personal and self-invested plans for pension needs you need to have a strategy about investing your contribution as it is your hard-earned money and you will be depending on the returns after your retirement. Therefore, a proper analysis is required to mitigate the risk, to diversify your investments and to decide and change the contribution as per your retirement goals.

Retirement Age and Options: The effectiveness of pension plan depends on how much clear you are about your retirement age and how want to receive the pension payouts like annuities, drawdown or total withdrawals. If you are unsure these facts taking professional help will surely help you a lot in making this decision based on your current situation.

Review and Adjustment: Your pension planning must be agile which means it should be able to accommodate changes in the market and economic conditions, it must also take inflation factor in to consideration as well. Reviewing your retirement strategy and adjusting it as per changing financial conditions is the key to achieve your goals early. Let us take an example here if you think that your income is going to increase substantially you must increase in few years contribution towards your retirement fund and if one of your investments are not working as expected you must consider diversifying by putting the fund somewhere else. This habit of monitoring and making adjustments can prove really effective in achieving your retirement goals much earlier than planned.

No one wants to work in their late fifties or in sixties, but the cold hard fact is a very small percentage of working people is able to achieve the financial freedom early to gift themselves an early retirement. Every working professional must have a strategy to work efficiently and invest effectively so that they can achieve a state early in their life where they are working for their passion and not to just survive and pay the bills. Trust the fact that harder you work in your twenties and thirties; more are the chances you would not have to work after your late forties so that you can enjoy the financial freedom that you deserve and explore more about this beautiful gift which we all call life. Planning and perseverance can make dreams come true.

It is tough these days for an average working person to maintain a decent standard of living and pursue financial freedom unless you are working for a big organisation or you have a business which is generating as stable and increasing income. And if your present income is falling short in achieving the savings and investments you want to make side income can be the best solution to achieve the level of savings you want to make. Everyone starts somewhere and picking up a side hustle does not mean that it’s hard for you to make ends meet. It simply means that you are willing to put an extra effort to get you the leverage financially. Picking up a right-side hustle can open doors for entrepreneurship and personal growth.

So, in these dynamic times an individual must acquire a skill or must be willing to put extra hours in a part time job to earn money which can be further used to learn a skill or make investments. It is a simple cycle if you just think which is if you have a skill earn money and invest, if you don’t then put extra hours to learn skill then earn money and then invest to generate wealth. People have done it and made a name for themselves in the society. These days anyone can work a bit extra and learn a skill and leverage it for financial gains and get closer to their financial goals. Let’s try to explore some areas where an individual can put effort and upskill or use a skill to get paid.

Freelancing opportunities in United Kingdom:

Globalization and outburst of information technology has actually made it easier for people to use their skill set in problem solving in various domains like web development, graphic designing, writing and content creation, digital marketing, analytics, consulting and coaching, service management etc. United Kingdom’s economy provides ample opportunities to work in these domains as a freelancer on a project-based role:

Writing and Content Creation: As the name suggests it requires a decent working knowledge of a language and cleverness to use writing tools available. You can easily become a freelance writer and create content for websites, blogs and publications to get paid decently.

Graphic Design: In any business creativity is the key to establish the brand image of the organization among the customers. And that is where these professionals are required by startups, organizations and sometimes even governments for branding by using creative and meaningful logos and graphics to convey the vision of organization. These professionals have huge demand globally and the only prerequisite is a creative mind and working knowledge of tools Canva, illustrator etc. 

Web Development and Design: Today online presence is a mandatory for any business to grow and develop in to a brand irrespective of its size and domain. Hence there is a constant demand of people who are skilled in the discipline of web development and designing. With hard work and perseverance this amazing skill can be learned for free from various websites and YouTube channels and this is among top skills to have in this decade as it is a crucial requirement for any business in any domain. 

Digital Marketing: Every organization in every domain may it be product oriented or service oriented requires marketing because a business generates money by selling its products and services and to sell these services or products and marketing finds the potential customers for a business. Digital marketing helps the businesses to reach a wider audience online. Skills like search engine optimization, email marketing, social media marketing helps businesses to gain wider range of audience and customers for their products and services. And hence the demand for digital marketing professionals is here to stay so this skill set can be an amazing side hustle.

Consulting and Coaching: Consulting has always been a high in demand service that businesses require in various aspects like finance, marketing, new product development, quality management, process excellence and human resources. People with excellent problem-solving skills and domain knowledge can make impressive income by providing consulting services as a side hustle. Coaching services can also be an impressive side hustle in the areas of business development, career guidance, finance, information technology etc.

E-Commerce and Online Selling:

In today’s technology driven market almost every business in the world want to sell their products online and it creates the opportunity and demand of online marketplaces. Creating an e-commerce platform can be an amazing source of income forget about it being a side hustle it can become a flourishing business that can serve customers’ needs in any domain like groceries, clothing, medicine and even getting a pet adopted online in United Kingdom.

Drop shipping: 

You might have seen a lot of ads these days about drop shipping on the internet, in simple words it is just facilitating the connection between products and the customers online. It requires only the skill to create an online store so that you can sell the products of suppliers online. The process of selling products online eliminates the need of inventory management and saves a lot of money. Technically skilled people use drop shipping as a source of passive income.

Handmade Goods: 

Creativity pays and if you are creative enough to make hand crafted products like artwork, jewellery, accessories, portable furniture and market these products in a right way you can create an entire segment of market for yourself. You can have a website to sell your products or use platforms like Etsy. 

Print-on-Demand: 

Customization is a luxury that everyone wants. People to wear their thoughts literally on their sleeves. So, if you are creative enough and have a good network to promote customized products you can definitely sell custom merchandise like t- shirts, coffee mugs, phone cases and create a passive income

Gig Economy Jobs:

Gig economy jobs means jobs that you can do as side gig to support yourself financially. These jobs can help a lot if you are planning to accumulate funds to learn something, get a course, certification or even a degree, students do these when they usually migrate to a different country to support their expenses during their course duration. Popular gig jobs in the United Kingdom can include driving for platforms like Uber, Lyft etc, food delivery for platforms like Deliveroo, Uber eats or just Eat. Running basic errands for clients through portals like Task Rabbit, Gig walk etc. Even dog walking or pet sitting is becoming a popular choice for side hustle these days, in fact there are some dedicated portals for it like Rover or Paw shake.

Online Courses and Coaching:

Teaching is one of the most prestigious jobs and what if you can make a decent amount of money doing it online the rising demand for knowledge in present age has transformed the education system around the world. Learning day is easy and if you have skill of teaching with expertise in domains like language, coding, marketing, fitness, finance, mathematics, statistics, analytics you have the potential monetize your knowledge and that too at a global level. Platforms like Udemy and various new ed tech start up can provide a decent income for online teaching. So, this side hustle can become your thing to do in no time.

 

It is simply a matter of willingness to put efforts with dedication towards your goals. Dreaming alone about success will not get you success it is conviction towards goals, dedication to put in effort consistently and not quitting even in hardest times. If you can’t run jog, you cannot jog walk, if you cannot even walk crawl but no matter what keep moving everything else will fall into place. Remember hard work combined with perseverance will make you unstoppable.