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Formulating Your Money Strategy

In this chapter, four things that really matter: ~ Preparing background information ~ Doing your financial health check ~ Making strategic decisions ~ Analysing your savings needs.

Unless you are qualified, you cannot be your own doctor, but with some help you can be your own financial adviser.

Carrying out a financial health check is the first stage in managing your money and is the cornerstone of this book. It is rather like the 'fact-find' that a financial adviser carries out on a new client, but is much wider in scope.

A financial adviser will ask you for certain background information. You already know all this but you need to bear it in mind as you do the check.

Having made the check, you can plan the action you need to take in order to get yourself up to par. This may well include the need to save.

Is this you?

• My finances are in a mess and I don't know what to sort out first. • I think insurance is a waste of money. • I'm too young to worry about a pension. • I wish I could afford a holiday. • I can save a bit each month but I just put it in the building society. • How can I make sure my children get all my savings when I die and not the Chancellor?

Preparing background information

Personal profile

A financial adviser will ask you your age, whether you are employed, self-employed, unemployed or retired, whether you are married, have children still dependent on you (or any other dependents, such as a widowed mother without much pension) and what is your highest income tax rate (your marginal rate).


If you do not have a clear idea of your weekly or monthly income and expenditure, prepare a budget. Include in it any savings you are making for a specific event.

Your financial assets and liabilities

List any savings and investments you have, followed by a list of any liabilities, such as bank overdraft or credit card debt. The difference between the two is the value of your net current assets (if it is a negative amount, you need to plan to reduce your debt).*

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