Have You Stress-tested Your Personal Finances?

Investment Advice, Back to Blog

2022 promises to be a new beginning

Have you stress-tested your personal finances?

As we emerge back into the sunlight after the gloom of the Covid-19 pandemic, we can look forward with optimism and positivity as the world starts spinning normally again. As we look forwards, it makes sense to take stock of where we are today. We’re all doing this instinctively in relation to our health, our potentially changed work environment and many aspects of our lives. However as our lives may change in the future, it also makes sense to consider the impact of these changes and consider whether you have really stress-tested your personal finances.

stress-tested-your-personal-finances-Advice-First-Financial-Services-Donegal-Stress-Testing-Finances

When you take out a mortgage or request a loan from a bank, they stress test your finances as part of their process. They want to ensure the loan will be repaid, so  they consider whether you will be able to cope with a rise in interest rates and look at the security of your income. We believe that all of us should carry out our own mini stress test across our finances, to ensure we can cope with any uncertainty down the road. Here are a few areas to consider.

Have you stress-tested your personal finances?

Ensure you’ve sufficient personal finance protection in place

After Covid-19, we’re all much more aware of the fragility of our health. Sometimes poor health visits families unexpectedly, causing a lot of worry and uncertainty. Don’t exacerbate this fraught situation by heaping worries about your finances on top – you can prepare for this in advance by reviewing your Mortgage Protection, Life Assurance, Specified Illness Cover and Income Protection policies. Having sufficient financial firepower in place will help you concentrate on recovering your health and living the very best life possible.

As part of our review service with clients, we can help you to stress test your finances. Please just give us a call and we can get you on the path to ensuring your personal finances are in the best shape possible.

Do you have a sufficient emergency fund?

stress-tested-your-personal-finances-financial-goal-setting-and-emergency-fund

We always encourage clients to have a nest egg that can be accessed immediately and that will see them through approximately 3 months, should their income source dry up overnight. This doesn’t necessarily mean that you need to keep a large sum in the bank, earning no interest. However your emergency fund needs to be in assets that can be liquidated immediately to enable you to access the money at short notice.

Avoid unnecessary borrowings

Have you stress-tested your personal finances?

Live within your means and don’t fund your lifestyle or indeed discretionary purchases through borrowings. Wherever possible, pay for these the old-fashioned way – by saving first and buying later. Debt is an enormous source of worry when there is a shock to your income.

Stay up-to-date on LinkedIn, connect with us here.

For more advice on Savings, Retirement and Investments:

Get Advice

Talk to us now and make an appointment with one of our Letterkenny team of QFAs. We are here to help with your Financial Planning Concerns. Ask us questions on Retirement & Pension, Life Insurance & Protection, Mortgages, and Investment Advice. Get in touch here or give us a call at 074 91 03938.

Financial Services firms in Ireland are regulated by the Central Bank.

For the latest updates and financial news, connect with us on Facebook and LinkedIn.

Related Posts

Mortgages When Earning Sterling

Mortgages When Earning Sterling

This is an area of confusion for lots of people. Especially for our friends living in or working in Northern Ireland who want to buy a home and live in the Rep. of Ireland. Advice First talks about Cross Border Mortgage Donegal for those earning Sterling.

read more
About Your New Year’s Resolution

About Your New Year’s Resolution

Did you know that there are investment options designed for all budgets? You don’t need to be wealthy to get started with investing. In fact, Advice First offers investment plans for as little as €100 per month.

read more
Setting Smart Financial Resolutions in 2023

Setting Smart Financial Resolutions in 2023

Making New Year’s resolutions concerning your finances can be a daunting prospect, especially when you consider the range of topics that need to be addressed. From creating budgets and setting saving goals to fixing your credit score and investing wisely.

read more