Taking Control of Your Finances: The Importance of Financial Understanding

Guest Blog in partnership with KLO Financial Services

When preparing for the future, having the necessary personal finance skills and financial understanding will help you to ensure that your money is managed well. In this exclusive guest blog, our partner KLO Financial Services outlines why having good financial knowledge is important, and why you need to take control of your finances sooner rather than later.

Personal finance includes all aspects of organising your finances such as budgeting, banking, insurance, mortgages, investments, estate planning and retirement planning. Having the necessary knowledge to make informed decisions when it comes to your finances will help you to meet both short-term and long-term goals. Whether it’s ensuring that you have enough money for your essential bills or paying for your children’s university fees, this is all personal finance.

Why is having a good financial knowledge important?

By taking control of your finances and ensuring that you are financially literate, you can distinguish between financial decisions that will be beneficial or hazardous to your financial future. In many cases, you may decide to use the services of an independent financial adviser, who will be able to support you with your finances for many years, as you experience life-changing events.

Irrespective of this, ensuring that you understand your finances is vital. The sooner you plan your finances, the better.

Identifying your financial goals

Understanding your finances will allow you to think of your financial future in a much broader perspective. After establishing your income, what your expenses are and what plans you have for your future, you can set up and plan the steps you need to take in order to achieve this. Factors you should consider include sticking to budgets, paying bills, saving for retirement, credit cards and outstanding debts.

With a proper financial plan, you can manage your income effectively, spending on what is necessary and saving or investing the rest. Personal financial planning allows you to utilise the funds you have available to build a better future.

When you possess the proper personal financial knowledge and skills, you have an advantage when financial challenges, opportunities or responsibilities arise. An independent financial adviser will work with you to provide thorough personal financial management solutions to suit your individual circumstances.

Offering security to your loved ones

Understanding and planning your finances will support you in providing your family with financial security. A key part of this includes having the correct insurance policies in place to provide you and your loved ones with security, should anything unexpected happen.

Not only this, but understanding key features to your finances such as inheritance tax planning can be useful. One of the primary benefits to inheritance tax planning is the increased financial protection for your family. After working for your own financial success, reducing your inheritance tax liability passes more of your estate onto the loved ones you leave behind.

Seeking the assistance of an independent financial adviser can help to educate you on the ever-changing laws and regulations, as well as how certain inheritance tax planning strategies would be beneficial to you and your family. By expanding your financial understanding, you will find it easier to measure your estate planning goals and make financial decisions for the future.

Increasing your investments

By taking control of your finances, you can make knowledgeable decisions when selecting investments, based on factors such as your personal circumstances, objectives and risk tolerance. It is therefore important that you ensure you have adequate knowledge of your finances in order to determine the real value of your assets. This way, you are able to continue to grow your finances.

A financial adviser will be aware of both regional and global financial markets as they keep track of trends to support their clients with growing their investment portfolios. When considering your investment needs, a financial adviser will often be assisted by other advisors, analysts, and industry experts, who will research the best opportunities for you.

Understanding your taxes

One of the key features of taking control of your finances is ensuring you have a complete understanding of your taxes. Depending on your personal circumstances, you may be eligible for different taxes, which are your responsibility to ensure they are paid. For example, if you are self-employed, rather than an employee of a company.

Not only this, but you will also want to ensure that you are making the most of your assets by investing in a tax-efficient manner. There are many different investment vehicles available, such as Individual Savings Accounts (ISAs), Pensions, Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EISs), amongst others. Tax-efficient planning creates a successful and resourceful approach to achieving your life goals.

A financial adviser can support you with this, advising you of the latest relevant changes to legislation as well as tax efficiency.

KLO Financial Services

Trying to understand your finances is one step to having a stable financial future. At KLO Financial Services, our focus is solely on you and your needs, allowing us to operate in a manner that helps you to reach your financial goals in the most efficient way possible. Our team of independent financial planners successfully combine an innovative, client-focused philosophy with all the strengths of a traditional personalised service.

If you would like to find out more about how we can help you take control of your finances, please contact one of our independent financial advisers by calling 01926 492406.





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