Wealth Check: 'I'm quite rubbish with my money'

Eleanor Harding
Saturday 27 March 2010 01:00 GMT
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Stacey Gower, 24, is a trainee accountant from Kilburn, north London. Her salary will go up with every exam she passes, but when it comes to saving for the future, she has no plan. "Ideally, I'm saving for a deposit for a house but I'm quite rubbish with managing money," Stacey says. "General advice on savings and budgeting would be really good."

Case notes

Annual income: £27,000
Monthly outgoings: £1,280
Savings: £3,200 in a Citibank fixed-term deposit; £4,000 in an ISA
Student loan: £12,000

Advising Stacey this week are Steve Smith, from Davison Smith Financial Management; Danny Cox, of Hargreaves Lansdown, and Duncan Carter, from Clearwater Financial Planning...

Planning

Cox thinks Stacey is in a decent position, with savings, a manageable student loan and a work pension scheme. Now it's time to decide on long-term goals. In Stacey's case, that could be buying a property, but she'll have to calculate how much deposit she needs.

Saving

Carter thinks Stacey has £5,000 of uncommitted income per year, which should be channelled into a competitive savings account such as an ISA.

Pension

Stacey opted out of making extra pension contributions, even though they would have been matched by her employer. Carter says: "Not taking the matched increased pension contribution is akin to not taking a pay rise and I would reverse this. Don't forget tax relief is granted on contributions, so the taxman chips in as well."

Will

"It would be wise to make a will in the forthcoming months," Smith says. "Shop around, as the difference in the cost of the construction of a will can vary dramatically."

Benefits

Stacey needs to investigate what benefits she is entitled to at work and whether they are sufficient to prepare for sickness and injury.

Cox explains: "Stacey may need to top up the sickness benefits with an income protection insurance policy to ensure that her income needs are met in the event of long-term illness."

For a free financial check-up, write to Wealth Check, The Independent, 2 Derry Street, London W8 5HF; or email wealthcheck@independent.co.uk

To find an independent financial adviser in your area, visit www.unbiased.co.uk

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