Five ways women are making financial mistakes | Rebecca Robertson, Evolution for Women

moneyNew research from Scottish Widows has revealed that one in five households would not be able to maintain financial stability if the main earner lost their income. According to a study by Public Health England published in April 2016, women aged under 65 are likely to spend almost a third of their lives in retirement.

So we (women) are living longer, to 81 is the average, however we aren’t saving in the meantime to support retirement or our day to day lifestyles if the main household income stopped.

There is always so much to pay out for: train fares are only going up in price, child care fees are often as much as your monthly outgoings, rent which are again only increasing or mortgage to pay. Knowing what to do can be difficult. There is a lot of pressure to have a nice car, nice house and nice things. What would you forgo towards a greater financial plan?

What are the top five mistakes we are making?

Not saving

Even putting away a very small amount each month will help you to build up a nest egg. You need to strike a balance between having enough to cover your means, and saving enough to cover you in the event of a financial emergency.

Over spending on things we ‘want’ but do not ‘need’

In order to fund this financial backup plan and start saving more money, look at where you can adapt your lifestyle to reduce your spending. This could include limiting takeaway coffees to once a week, cancelling the gym membership you never use, or switching to a more competitive energy provider.

Not planning ahead

Once you start building up your savings, do not be tempted to dip into it for non-essential reasons. It is not a holiday fund or an excuse to treat yourself! By planning a holiday, Christmas, day trips or family birthdays you can allocate monies for certain areas of your life.

Taking out loads of life cover and nothing else

Critical Illness cover an insurance policy, which will pay out on diagnosis of the illness after surviving a certain amount of days (typically 14). It pays out as a lump sum, which can help towards medical costs, reducing debt capital (e.g. mortgage) or making alterations to the home following a debilitating illness. Income protection insurancesome households also take out income protection insurance. This covers an individual when they are unable to work due to accident or sickness. The cover is not about circumstance but rather whether or not you are able to carry out the duties of your own occupation. There are no specified conditions, unlike with critical illness cover, where claims are made against the specific conditions listed in the contract. Income protection insurance is great for covering your everyday living costs which is a key reason for taking it out. It also would only start once your employers has stopped paying you, so knowing what sick pay cover you have at work is important.

Have pension plans all over the place

Often clients have pension pots from their last two or three employers which generally have small to medium funds in them. They are left to maybe reduce in value as the fees are high and the returns are low. When offered a pension contribution to their new employer the old ones are forgotten and they contribute the minimum allowed into the new one. Having these old pensions reviewed is vital and asking your employer for all the pension options so you can make an informed decision is key.

When you need to think about your financial plan, contact Evolution for Women to arrange your own financial review.

Check their budget planner and blogs for more information via the Evolution for Women website.

The Financial Conduct Authority does not regulate wills, taxation and trust advice.

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.

The value of investments can go down as well as up and you may not get back the amount invested.

About the author:

rebecca-robertson

Rebecca Robertson, award winning founder of Evolution for Women and regular media commentator on financial planning and Huffington Post Blogger.

Rebecca is known as the financial planner who is passionate about putting women firmly in control of their finances. She has helped thousands of individuals and families to achieve financial freedom and given them peace of mind that their finances are properly protected in case the worst should happen.

She provides holistic and independent advice to clients, but also gives vital financial planning advice as a media commentator, with regular slots on BBC Radio Kent and in Mortgage Introducer Magazine advising on financial issues particularly in relation to women. Rebecca has also appeared in the Independent’s ‘Women in Finance’ and is a financial expert for the Talented Ladies Club. In addition, Rebecca has won many financial and banking awards for her work with women’s finances.

Evolution for Women was set up by Rebecca as her many years in financial services continually highlighted the gap between men and women when it came to understanding and managing finances. It is Rebecca’s aim to raise awareness of financial issues affecting women and their families, and to put women in the driving seat when it comes to financial preparation.

Through her financial planning business, Rebecca is also empowering women to take the lead in financial services (which is hugely male dominated) with all-female financial advisers growing and building their own successful businesses under the Evolution for Women brand.

In addition, Rebecca is also developing a suite of tools and online programmes designed for women to self-manage their finances competently and successfully. These tools, which include a bookkeeping app, cash management tool and online money management review will be developed in the context of helping women to understand the importance of goal setting in a financial environment, and that regular money management needn’t be arduous or complicated, but is necessary to ensure growth and remaining in control.

Rebecca herself is constantly striving to uphold these values of personal development and increasing her thirst for knowledge as she is in the process of qualifying to become an independent financial adviser who can provide investment and pension planning advice and guidance in addition to mortgage, life and protection advice services.

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