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Three ways to take back control of your finances

  |  July 4, 2013

Our personal wealth is often tied to the actions of those calling the money shots.†Chris Ferguson, managing director of Guardian Wealth Management in the UAE, offers three steps to put you back in the driving seat of your finances:

Are you as crisp and sharp as an IMF report or are you as lethargic as growth in the EU?†Whether itís IMF economic projections, Mark Carneyís arrival as Governor of the Bank of England or positive signs of stronger than expected growth in the UAE region, our financial health in terms of job security and ability to save is often dependent on the decisions of those in power.†But what about calling your own money shots?

To do this, †you first need to turn your mind to the task of boning up on all areas of financial management so you can accurately reflect your savings potential and maximise investment choices for both the medium and long term. Calling the money shots also means wrestling back control of any area of your personal finances that has outgrown its usefulness or turned out to be a non-starter in terms of delivering worthwhile returns:

1. Cash

Starting with cash savings, expats are urged to check that all nest eggs are earning the best interest rate available. In these days of the lowest ever rates and volatile currencies, this particular task of comparing one account against another isnít easy. However, if you want to call the shots then itís important this is a job that you undertake at least once a year. Check whatís available from offshore centre deposit takers paying close attention to minimum balances and terms and conditions which, if not adhered to, could jeopardise any interest earned. Look ahead to see if you are saving in the right currency. If you know you need a certain balance to build up for a euro expenditure, check out whether it would be more prudent to run a euro-denominated savings account. Expats should be monitoring those deposit takers whoíve earned a reputation as being Ďconsistently good rate payersí, rather than opting for the current best offer of the day.

2. Savings

Long-term savings such as pension pots are trickier to bring under control as many expats find themselves too busy with their own careers and family life to be monitoring the best possible share index, investment fund or savings plan. So yes, I am going to say this is best achieved through a financial adviser! But this doesnít mean you arenít calling the money shots. You are, provided that you are clear about your objectives and understand the products you are investing in. Pay particular attention to product charges, the annual return you hope to achieve based on the level of risk you are prepared to take and whether you can exit from an investment without it costing you the proverbial arm or leg. This way, you remain in control with your financial adviser facilitating the process of mapping out the best investment strategy for you based on your age, tax position, financial circumstances and your ultimate life aims.

3. Spending

Sadly, spending is one area that needs particular monitoring if you are to call the money shots over your present and future finances. I wonít be a bore about this as most of us want to enjoy our spending rather than feel guilty about it. But, thereís a difference between indulging in the odd extravagance and engaging with a spending habit that just regularly chucks money away. No one knows what is around the corner, whether itís an unexpected health bill, school fees or job loss, but having a financial cushion is one way of keeping financial control and avoiding potential stress. Itís your call.