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Summer is here; but the seasons can play havoc with our wealth 

For many self-employed and seasonal workers the summer months bring financial highs. Businesses alongside tourist coastlines make most of their money, professional gardeners have full diaries, and producers of garden furniture, camping equipment and ice cream can all see profits peak. 

But the reality is that a financial high in one season can be followed with a low in the next. 

As Wealth Planners we often see that those who are in receipt of a regular income find it natural to save on a regular basis. Investing into an ISA and a pension is inevitably easier when you know how much you will be paid each month. In contrast, those who earn the bulk of their income in a few short months can feel nervous about committing to regular investing for the future.

Yet there are financial goals that we all aspire to, irrespective of whether we are employed or self-employed. This can be a pension at retirement, a life insurance policy to provide for our children in the event of our death, or an investment for the future.

For the self-employed, and in particular for those with seasonal earnings, it is important to financially commit to plan for the future, putting aside money in the months when it is affordable to do so. Working with a Wealth Planner can help you to achieve this.

Here are our five tips for financial planning even when your income fluctuates:

  1. Start with a blank sheet of paper and work out where you need to be in 5, 15 and 25 years’ time. Don’t limit your thinking; it could be a geographical location to live, the idea of starting a family or making a career change. These life goals are the underpinning to wealth management and creating your monetary goals may require more focus and attention for those with inconsistent earnings.
  2. A Wealth Planner can help you to establish how much you need to save each month in order to achieve your plans and advise you on the best type of account to suit your needs and time frame. Don’t get trapped into the idea that you have to save or invest a regular amount each month, you can make contributions into many plans on an ad hoc basis, so even a pension can fit around the highs and lows of seasonal earnings.
  3. It’s particularly important to create layers of accessibility to your money even if your income fluctuates as you may need to access money unexpectedly or sometimes even urgently. This means easy access to some money for cash flow issues, and notice or investment accounts which are less accessible but may produce better returns in the long term. This also means reviewing cash which you may have stock piled into poorly paying instant access accounts. This money could work harder for you.
  4. Look at your financial responsibilities; this is particularly important for those that are self-employed and do not have the sickness benefits that employed people may have. If you have a partner, children or debts, think about the financial vulnerabilities in your life, for instance what would the financial implications be if you became sick or died? Reviewing your insurance policies need not be expensive. Too often people take out policies and forget about them. You need to make sure the information on your policies is correct and the sum assured (the amount that will be paid out in the event of a successful claim) is still enough.
  5. Don’t think that you can’t save for the future. As mentioned above, you can save on an ad hoc basis; you just need to make sure that your saving arrangements work for you. Many people who don’t have control over their wealth are those who haven’t invested the time into sorting out their money. Regaining control of your long term financial goals inevitably means that day to day spending is also addressed. 

To find out more about managing your wealth, please get in touch, we’d love to hear from you.  Email letstalk@sanlam.co.uk.

Date issued: 16.07.15

Please remember any views or facts expressed above are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness. Any expressions of opinion are subject to change without notice. None of the information should be regarded as advice. Past performance is not a reliable indicator of future results. Investing involves risk and the value of investments and the income from them may fall as well as rise and is not guaranteed. Investors may not get back the original amount invested. Any tax treatment is dependant upon individual client circumstances and may be subject to change.

Sanlam is a trading name of Sanlam Wealth Planning UK Limited (Reg. in England 3879955) and English Mutual Limited (Reg. in England 6685913). English Mutual Limited is an appointed representative of Sanlam Wealth Planning UK Limited which is authorised and regulated by the Financial Conduct Authority.

Registered Office: St. Bartholomew’s House, Lewins Mead, Bristol, BS1 2NH.

Investing involves risk and the value of investments and the income from them may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.