The benefits of financial planning

by Leeds Building Society

The benefits of financial planning

Financial planning isn’t just about stocks and shares or investments. It’s about knowing what your financial goals are and understanding how you will achieve them. We all know that planning ahead means we can make the most of life, so why not plan ahead to make the most of your finances. But where to start? Here we take a look at how you can start planning your finances.

Rough Guide to Money & Savings Download the guide (PDF)

Setting your savings goals

Setting a goal for your savings is a great place to start when you are planning your finances. A goal will give you an end point to work towards. If your savings goal is big or far in the future, give yourself savings milestones to help you stay motivated.

Your income

Income is the money you receive. The most common types of income include wages from your employer, earnings if you are self-employed, rental income and interest from your savings. You may also receive benefits. Most people will find that their income is fairly predictable each month. You should review this every month to make sure you are receiving everything you should.

Your outgoings

The Office of National Statistics* states that the average home spends £489 per week on things like food, recreation, transport and clothing. Writing it down and creating a budget of all your expenses is a great way of understanding exactly where your money goes.

Managing your spending

You can split your spending to two categories, essential spending and non-essential spending. Essential spending includes things such as rent or mortgage, bills and food. This is spending that will happen regularly. You need to make sure the income you have covers all your essential spending. Non-essential spending includes treats or activities. These are things like new clothes, takeaways or holidays and days out and are usually the area you can usually cut back on.

Dealing with debt

It’s important to know exactly how much you owe and to stay on track with your repayments on any mortgage, loan agreement, credit card or any other forms of credit you have. For more information on how to deal with debt, take a look at the Money Advice Service website.

Find out more about understanding money and savings.

Legal & General, one of our partners, has teamed up with Rough Guides to create free financial guides. The second in the series covers money and savings and is available to download on our website.

Rough Guide to Money & Savings Download the guide (PDF)

Other guides

Download the Rough Guide to Family Finances.

*Office for National Statistics: Family Spending, 2013 Edition

This guide is intended as a summary only and does not constitute legal advice given by Leeds Building Society. No reliance should be placed on this guide and you must make your own decisions, we recommend that you seek legal and/or financial advice if you have any questions or queries.

§ Tax-free means that interest payable is exempt from income tax. Cash ISAs are available to individuals aged 16 and over who are resident in the UK for tax purposes.