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Playbook for Financial Stability: Learnings from a Once Financially Naive Practitioner

The Ignorance I Couldn’t Afford

For years, I was engrossed in my career as a sports science practitioner, utterly oblivious to the financial neglect happening on the side. When reality knocked on my door, it wasn’t holding a bouquet—it was handing me a bill. If i could have my time again (even when I was earning £10,500 at Worcester Sports Performance Centre in 1997) here’s what I wish someone had told me years ago, meticulously crafted so you can avoid my missteps.

1. The Emergency Fund: Not Just a Good Idea, a Lifeline

An emergency fund isn’t about being pessimistic; it’s your financial safety net for life’s curveballs. Start by setting aside 5% of your monthly income in a separate, easy-access account. Use a standing order to make this automatic. Once you reach three months’ worth of living expenses, aim for six. You want this fund in a high-yield savings account, not under your mattress – otherwise your losing money. This is a top priority start this one today!

2. Budgeting: A Novel Concept for Some, A Lifesaver for All

If you think keeping a budget is optional, you’re setting yourself up for disaster. Use budgeting software like YNAB (You Need A Budget) to track every penny that comes in or goes out. Allocate percentages of your income to necessities (50%), savings (20%), and wants (30%). Adjust as necessary, but don’t let ‘wants’ overtake ‘needs’ or ‘savings’. Most people, most of the time are spending money on things that don’t add value to their lives. Plan your outgoings, save for luxuries. Recommended read ‘Your money or your life’ by Vicki Robin

3. Tackling Debt: It Won’t Just ‘Sort Itself Out’

Debt can become a spiralling pit if left unaddressed. List all your debts, from credit cards to loans, and sort them by interest rate. Pay off the one with the highest rate first. If the list is overwhelming, consult a debt adviser for a structured repayment plan.

4. Investments: Where Money Goes to Grow Up

Investments are the long-term game plan for your money. Open an Individual Savings Account (ISA) and start with a low-cost index fund. Once you have 1 & 2 above, in place, consider putting 10-15% of your income here. As you become more comfortable, diversify by adding bonds or individual stocks. Always consult a financial adviser before making significant investment choices.

5. Specialisation and Outsourcing: Know Thyself, and Know Who to Hire

Being a jack of all trades isn’t an asset in today’s complex world. Stick to your expertise in your career but don’t hesitate to hire a tax adviser, legal consultant, or even a financial adviser for areas outside your purview. The cost now can save you financial pain later.

6. Insurance: The Non-Optional ‘Optional’ Safety Net

Insurance is not where you want to cut corners. Start with basic life and health insurance. Then consider additional plans based on your circumstances, such as income protection or professional indemnity insurance. Get multiple quotes and scrutinise the fine print before committing.

7. Networking: Beyond Social Media Friend Requests

Networking is your off-the-books strategy for career and financial growth and opportunity. Join industry-specific organisations, attend webinars, and contribute to relevant online forums (hello). Don’t just “connect” on LinkedIn; engage with your connections by sharing insights and asking for recommendations.

8. The Virtue of Sharing Knowledge: Become the Mentor You Wish You’d Had

Holding onto your wisdom helps no one. Share your thoughts here in our community, disseminate what you’ve learned, ask questions. Not only does this develop accountability, perhaps sharing your expertise and experience can help others avoid the pitfalls you’ve encountered.

In a nutshell: What Financial Management Really Boils Down To

Financial management is essentially risk management. It’s a proactive stance towards life’s uncertainties, setting the stage for financial growth and peace of mind. To quote Suze Orman, “The only way you will ever permanently take control of your financial life is to dig deep and fix the root problem.”

Your move. Choose to be proactive about your financial wellbeing, your future self will thank you.

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