5 Money Questions To Ask Yourself

Published / Last Updated on 22/01/2015

Video provides food for thought with five thought provoking questions to ask yourself about your money this week.


“Hello there.  This is a test, a little bit thought-provoking for you to have a think about your finances, so five questions to ask yourself this week.  Its January 2015 and it doesn't matter whether it's the New Year and your spring cleaning your finances, making New Year's resolutions or whatever it might be, you should ask these questions of yourself and least every six months or so.

So the first question is:

Where is your pension fund invested?

Where’s your pension fund invested? Do you know where your pension fund is invested?

The reason I raise that is markets are quite volatile investment markets are rising and falling all the time it, whether it's oil prices or inflation or economic concerns or concerns about banks or whatever it might be, markets are quite volatile and keep swinging up and down very, very, very regularly.  So the question is where is your pension fund invested?  Is it still invested where you originally invested in 5 years, 10 years, 15, 20 years ago?  Have you been actively looking at your pension funds or your investment funds, I’ll include that as well, to see where their invested?   Because there will be periods when perhaps you could have switched out of a market that was about to fall and reinvested your pension fund, inside the same company, in funds that were about to grow.  So if you don't know where your pension fund is invested then you need to find out and perhaps need to take some professional advice.

Okay, second question.  Second question, [I] wonder if you know this one?

What are the charges, the percentage charges on your pensions and investments?

Do you know what the charges are on your pensions and investments?

There is a huge, huge difference across the whole financial services industry of the charges that are levied on people's pensions, investments, ISAs etc.  Now if you don't know what they are, ask your financial adviser.  If you haven't got a financial adviser then find out what the investment charges are on your pensions and investments because, I promise you, if you took out a pension or investment at number of years ago those charges may be quite high compared to where charges are today on newer type contracts.  [This is] because the financial services industry has changed quite dramatically over the last two years or so where there is not much more transparency on the charges that are levied on people's pensions and investment funds and it maybe that you’ve got management charge over here of let’s say 2% or 1.5% per annum but charges in the market may be available today of 0.20%, 0.30%, 0.4% per annum.  So huge differences, now that may not sound a lot but if you’ve got £10,000, £20,000, £30,000, £100,000 in your pensions or investment funds that difference in charges can be massive, in terms of the costs to you, what you're paying to have the same service. So find out what the percentage charges are on your pensions and investments.  Make sure you know what they are or talk to your financial adviser so they can tell exactly what the charges are on your different pensions and investments because you may be able to save and then ideally make more money.

Okay, so question number three:

If you were long-term sick so let’s say have a serious illness or a serious injury, how would you cope financially?

Do you know what benefits you get at work or don't you?  What sickness benefits have you got?  Have you got income protection insurance?  Have you got critical illness insurance?  Have you got life insurance?  I appreciate that’s if you die, but what we’re really talking about here is: what if you don't die?

Have you reviewed and looked at what your protection requirements are?  If you have dependents, a spouse or civil partner, common law partner, children being dependent on you etc.  How are you going to pay the mortgage if you got a mortgage?   So it's just a question that I want you to find out yourself.  Ask, find out what would happen. Think about what would happen if you were not able to work for a sustained period of time.  What would you get?  Is there any sickness insurance policy at work?  Have you got private sickness insurance?  Have you got redundancy cover and things like that?  So a quite a serious question there.  

Question number four, question number four is exactly, running along the same thought, the same thing that I just covered in number three it's:

If you are made redundant tomorrow, how would you cope financially?

How would you cope financially?  So, have you got an emergency fund that you can fall back on?  Have you got redundancy cover?

It's a big one that is, particularly if you’ve got a mortgage, children, dependents etc. How are you going to protect yourself?  [And] it's better to know than to not know and have thought about the worst-case scenario.

So [my] final question is:

How much do you spend on holidays and having a good time?

It might be: going to the pub, some people like going to the pub or having bottles of wine or beers or whatever, other people like going to the pictures or cinema or paying for Sky, you know, television, cable TV and sports television, movies and things like that. 

How much do you spend on your holidays?  How much do you spend on leisure?  And then I want you to compare that to: how much did you spend on getting professional financial and tax advice?

Now, if you spent a couple of thousand pounds a year on holidays or on television subscriptions or whatever it might be but you didn't spend money taking professional advice to make sure your money is working harder for you, is there something wrong there? 

I appreciate your need leisure, we all need to have a good time.  We need a holiday et cetera. but equally it's:

Could a financial adviser help me, because I’ve got a thing and I call it the money MOT service and many of my clients will be aware of the Money MOT service but it's the reason I compare it to a car, or indeed how much do you spend on your car and how much do you spend on holidays compared to your financial adviser?

[Because] I have a thing, I call it the money MOT service.  If you do not service your car, if you do not look after your car, check the tyres, the oil, water, fill it up with petrol et cetera it's going to break down.

[And] that’s exactly the same with your finances.

If you don't review your finances regularly and service them they are going to break down. 

All of those questions I mentioned earlier: pensions, charges, et cetera insurance, protection, what if I can't work? What if I’m off ill?  What if I’m made redundant?

There is a need here for us to review our finances on a regular basis so all I am asking you is that question: to ‘tot’ up how much have you spent on leisure, holidays, cars, drinks, presents, whatever it might be, having a good time, going to the cinema, paying for TV subscriptions compared to how much did you spend protecting your wealth by getting your finances regularly reviewed?

Because the finance bit: that is your financial welfare for the rest of your life.

Now I don't mean this to be the gospel and telling people what to do or anything like that but I just would like you to think about finances.  So those are the five questions that I’ve asked you to think about: pensions, charges on investments and percentages, what happens if you're off work for a long period of time through illness? How would you cope financially once you lose your job?  And then likewise, how much do you really spend on leisure, holidays, having a good time television subscriptions et cetera versus how much do you spend on making sure that your finances have an MOT and are reviewed every year?  Thanks very much for watching."

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