Frequently asked questions - FAQ

The best way to start budgeting, if you have never done it before, is to start with tracking your income and expenses. You can use a Budgeting App, Google sheets or a Microsoft Excel Spreadsheet, or even notepad and pen, just to start tracking and categorising your income and expenditure.

First focus on essentials, the things it is impossible to do without, like housing, food, transport & heating. Then document what your expenses are for luxury spending, this is anything that is over and above the basics, so phones, cars, coffees, hair and makeup. This is your discretionary spending. 

A popular model is the 50/30/20 rule: 50% for needs, 30% for wants and 20% for savings or debt repayment.

Budgeting well helps you regain control of your finances and reduces financial stress.

SUMMARY

• Track your income & expenses first
• Prioritise essentials
• Identify discretionary spending
• Consider the 50/30/20 rule
• Gain financial control and reduce stress

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You may wonder what a financial planner actually does?

Well they help you create a personal strategy to manage your money, plan for retirement, reduce debt and grow your wealth. They help define and assess your financial goals, income and expenses. They will help determine your attitude to risk and risk tolerance, which will help build a comprehensive financial plan. 

Look for a person who is a CFP - Certified Financial Planner. This is the worldwide standard of excellence in financial planning. Our own Nicola Ellis has attained CFP standard and love putting this into practice, in Glasgow and beyond. When planning at this advanced level you are obliged to act in your clients best interest.

SUMMARY

• Create comprehensive money strategies
• Assess you financial situation
• Determine risk tolerance
• Look for CFP credentials
• Fiduciary responsibility
• Nicola Ellis CFP brings the standard of financial planning excellence to Glasgow and surrounding area.

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Financial planners recommend saving 3 to 6 months worth of expenses in an emergency fund. This fund should cover essentials like rent or mortgage, food or groceries and utilities in case of job loss or unexpected expenses. Store it in a high yielding savings account for easy access and growth.

SUMMARY

• Save 3-6 months of expenses
• Focus on essentials expenses
• Use a high yield savings account

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First of all search for a certified financial planner (CFP) in your area.

CFP is the standard of excellence in financial planning.

It might be worthwhile asking friends for recommendations. Look for someone with experience in your particular set of circumstances or the area you need help with. Once you have located someone, make sure you like the person and feel you can work with them for the long term. Financial planning has a long term outlook, so you can work towards and achieve your financial goals. Then read reviews, check credentials and schedule a meeting to ensure they align with your goals and values. Most will offer a complimentary first meeting to ensure you can both work with each other.

The last thing to check is transparency of fees, ask for a fee estimate after the meeting if the planner hasn't already followed up with this.

SUMMARY 

• Search for CFP credentials
• Get personal recommendations
• Find relevant experience
• Assess personality compatibility
• Research thoroughly
• Schedule an initial meeting
• Clarify fees upfront

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To find out whether it is better to pay off debt or invest depends on your interest rate and financial goals. If your debt has a high interest rate (eg credit cards) paying it first is usually offers a better return than investing. But this will depend on your current APR annual percentage rate.

The higher the APR,  the quicker debt snowballs.

However if you debt has a low interest rate you might benefit from investing while making minimum payments. A financial planner can help you balance both.

SUMMARY 

• Consider interest rates and goals
• Prioritise high interest debt
• Understand debt acceleration
• Low interest debt strategy
• Seek professional advice

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You might be living beyond your means of you regularly spend more than you earn, or rely on credit cards to cover expenses of have little to no savings.

Make sure your track your income and expenditure using a budget, to see if you are consistently overspending. 

You will need to adjust your budget to prioritise needs over wants and aim to save a portion of your income each month.

SUMMARY

• Recognise the money warning signs
• Track your finances
• Prioritise essentials
• Build savings habits

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The most common financial mistakes that people make in their 20s and 30s include not savings for retirement early, accumulating high interest debt, living beyond their means, not having an emergency fund and neglecting to invest. Avoid these pitfalls by creating a budget, savings consistently and investing for the future.

SUMMARY

• Financial mistakes are common
• Start retirement savings early
• Avoid high interest debt
• Build essential safety nets
• Use proven strategies to future proof

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