A recipe for financial success
Find out how to cook your way towards financial success in this step-by-step guide.
Last Updated: 1 January 2003
We're financial foodies over at Financially Fearless HQ, so we decided to dabble in a bit of "culinary" creativity. And what could be more enticing to cook up than a recipe for achieving financial success?
This recipe discusses how to cook your way towards financial success. It’s sprinkled with fun and a lot of precision - which is perfect for these cold winter months - but it’s not personal advice. If you’re not sure what's right for your taste buds, speak to a financial adviser.
Just like a balanced nutritious meal, a mix of ingredients is needed to provide financial resilience. Why not give it a try today?
Method:
Step 1: Sorting your debt
Not all debt is bad, but it must be managed and affordable.
Like an experienced chef, you need to maintain control.
Make a list of all your debts, including credit cards and loans.
Pay off more than the minimum repayments, starting with any high-interest rate debts first.
Create a budget to help you reduce your debt without giving up on everyday expenses.
A smart spending plan will also enable you to sprinkle money on the things you enjoy most.
Discover the ingredients to managing your debt
Step 2: Protect what you love most
Next, look to protect your recipe from life's surprises.
Consider types of protection like life insurance, critical illness cover, and income protection.
Failing to do so can be costly to your financial future.
Find out more about Protection Insurance
Step 3: Prepare for the unexpected
Next, build a cash buffer for emergencies.
Aim for around three to six months' worth of essential expenses.
Keep in a savings jar that’s quick and easy to access.
And don’t forget to shop around for the best interest rate.
Find out how to save for a rainy day
Step 4: Show your pension some attention
Begin by seeing if you have any gaps in your National Insurance contributions – to get your full State Pension.
Next, check how much you’re paying into your workplace or personal pension.
Use our calculator to see if you’re on track for your dream retirement.
If you can afford to, look for any matching opportunities your employer might offer.
Note to chef: You can normally only take money out of your pension from age 55 (57 from 2028).
Find out how prepare your pension
Step 5: Invest, invest, invest
Once prepared, season with investing to your taste.
Make sure you:
- Ensure the investment seasoning aligns with your future goals
- Don’t put all your money in one place
- Don’t take on more risk than you’re comfortable with
- Ask for advice if you’re not sure what’s right for you
Note to chef: When adding investments to the mix, the cook time should be a minimum of 5 years but it’s good to check-in on how your dish is getting on at least once a year. Investments can fall as well as rise in value, and you could get back less than you put in.
Take time to enjoy:
You’ve worked hard for your money. And you’ve made the effort to gather the ingredients and method for a recipe for success. So don’t rush enjoying the fruits of your labour.
Achieving financial success takes time and discipline.
Sticking to this recipe can help you build a strong financial foundation and help you achieve your long-term financial goals.
Join the Financially Fearless mailing list
Financially Fearless is the first step in empowering women to improve their financial health and wealth. Take your first step today and sign up for weekly emails packed full of expert content using the form below. Or if you’re on Instagram follow us @FinanciallyFearless_hl.
Please correct the following errors before you continue:
Hargreaves Lansdown PLC group companies will usually send you further information by post and/or email about our products and services. If you would prefer not to receive this, please do let us know. We will not sell or trade your personal data.
