Friday, 11 February 2011

Financial Freedom Blueprints

I have been reading lots of older blogs and found this from (dated 17 September 2010) which I thought might be good to consider.
  1. Do you know your financial situation?
  2. Are you doing something about it?
  3. Do you have a written budget?
  4. Do you have an emergency saving fund?
  5. Do you have health insurance?
  6. Do you have life insurance?
  7. Do you have a written will?
  8. Does someone else know where you keep all these important documents?

How did I answer?

  1. Yes I do!
  2. Yes I sure am!
  3. I most certainly do!
  4. Ahhhmmm...working on it!
  5. Not really something I need worry about as I live in the UK and have the NHS.
  6. Yes I do - not sure how great my insurance is but I have some.
  7. No - need to deal with this I guess as I do have some property.
  8. Something else I need to sort out.

See there you go - this is a good exercise to flag up some areas I need to deal with, with regards to my finances and it could be for you too.

Question 4 is also Dave Ramsey's Baby Step 1 and currently I have no emergency fund at all. My excuses for this is I plan to be out of debt by April so am snowballing all monies to clear my debt and will start paying in an emergency fund once the debt is all gone. Okay, so I am doing Baby Step 2 (Snowball debt) first but I have a method to my madness which is simply this - I am paying off a revolving credit account so you could say my emergency fund is being funded and going into the revolving credit account to keep the interest payments down. However it is there should I need it. Can I get away with this? Do you think Dave would approve?

Question 7 One of the problems I have with living overseas is that I am never sure if I should set up financial things in the UK or back home and this is another one of those things. I have a lawyer back home I should have a chat to about this issue.

Question 8 An easy one to deal with as I have a file for all my important documents and I think making copies of everything and sending them to a family member I can trust is probably a good idea. (Don't get the wrong idea about my family, I trust them all but some more than others if you know what I mean).

One question that is not including on the list and I feel should be is:

9. Do you have a pension?

I don't and it's something I am worried about, with hind sight I wished I had started a Stakeholders pension when they first came out about a decade ago. Another area that living overseas makes very hard to decide on.

How did you do? And what do you think of question 9 should it be added?

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