The Perfect Financial Plan For Women Starting Out - Evolution Financial Planning

It’s never too early to form a financial plan for your life. Whether you’re hoping to scale the career ladder, dream of owning your own home, or want to prepare for your future family, financial planning can make a massive difference to how quickly you achieve your personal objectives.

Particularly for women, the need to plan for the future is paramount. According to PwC estimates, females earn £300,000 less than their male counterparts on average during their working lifetime.

Click here to read our recent blog “The Gender Pay Gap Solution” to find out more about equalising pay across our society. 

What is financial planning?

It’s a phrase that’s banded around a lot, but don’t worry if you’re not sure what financial planning means – you’re not the only one!

On a basic level, it can involve budgeting; making sure you can meet all your monthly outgoings, ideally with a bit left over to put into savings each month.

There is one exception here: if you’re currently in debt, focus on getting yourself back into the black before you think about saving money. Debt (especially if it’s not repaid on time) can negatively impact your personal credit score, which will affect your attractiveness to mortgage lenders if you’re hoping to buy a house.

Saving versus investing: what’s best?

When you’re financially stable and ready to start planning for the future, you might want to consider long term investing – for example, in a Stocks and Shares ISA or your pension – alongside a standard savings account.

This can grow your nest egg quicker than standard savings, but bear in mind that the value of investments can go down as well as up and you may not get back the amount you invested.

Depending on how bold you want to be, there are a number of risk profile options available, which a financial adviser can talk you through. A medium-risk investment might not have the same high returns as high risk, but it offers greater stability.

Being young, you also have the benefit of choosing a longer time horizon for your investment. However, your investment plan should be mapped to your personal objectives – for example, if you’re hoping to buy a house in two years, choose that as your time horizon, so you can cash in the money for a deposit when the right moment comes around.

First steps for financial planning in your twenties

The sooner you can create financial plan, the better. To get you started, here are five things you should look to tackle as a priority:

  • Get to grips with your finances – download our budget planner so that your monthly outgoings are in one place
  • Cut your cloth accordingly – use this spreadsheet to work out how much you have left each month from your salary, and stick to this budget
  • Tackle existing debt – you can’t build a financially stable future with debt hanging over your head, so work hard to pay any loans, credit cards etc. off. Start with the debt that has the highest interest rate
  • Get saving – once you’ve paid off all your debts, start putting aside some money each month, both for financial emergencies and to support your life dreams
  • Consider investment – if you want to see greater yields on your money, talk to a financial adviser about investment options that may be suitable for you

Where can I receive financial planning support?

If you want to make the most of your money for now and the future, contact our team today. We offer tailored guidance for women at all stages in life, whatever your financial circumstances.

 

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