How Can You Get Financially Fit in 2023?

The last few years have been incredibly rocky, financial-wise, with pandemics, stock markets on the rise, and the cost of living crisis. So it is easy to imagine that many households don’t feel as financially fit going into 2023 as they might have felt in previous years. But that isn’t to say it is all gloom and dark clouds. There are some habits and tips everybody can do, whether you are looking to become financially healthier or if you are already economically healthy and looking to maintain it.

Do You Consider Yourself Financially Healthy?

There are usually three sectors on the financial fit scale. Some households are incredibly healthy or fit, others that are coping, and those who are struggling. The question is, where do you fall?

Are You Currently Fit?

Do you find that you are currently living within your means and that you easily get from one month to the next covering all expenses while still being able to save money and plan for retirement? In that case, you fall within this category. Households that are financially fit could look to make minor adjustments to increase or optimise their finances further. 

Sometimes minor suggestions might be to just re-evaluate all your expenses and check if there is anything that isn’t applicable anymore. For example, maybe you have a gym membership, but no one is going, or perhaps you are subscribed to software that you no longer use. A top tip includes making use of the ‘family shared’ options for accounts such as Amazon, PrimeTime, Spotify and Netflix.  Other changes might be if you find that you have substantial savings – maybe chat with a professional to see if there are benefits to paying off a mortgage or loan quicker.

Are you just making it?

If your expense amount is almost the same as your income amount, you might need to take a hard look at your budget. The issue with coping is that, occasionally, life throws a curveball at you, such as a car breaking down or the boiler must be replaced. To handle situations where a large sum might be required, you will need to alter your budget to allow for savings for these days.

Look to chat with a financial advisor who can provide some perspective on your financial situation. Set goals to allow you to start saving as soon as possible or to pay off any loans or mortgages quicker. Look at all your expenses and determine which are important and which are luxurious.

Has ‘struggling’ become your middle name?

If everything has gotten out of control, you first need to get hold of a professional that can work out a path for you. The worst thing you could do is continue to take out loans and borrow money, not knowing when you can pay anything off, just hoping for a miracle. The best thing you can do is get support from a professional in the industry who can assist you, provide advice and show you the path to getting out of debt.

This path will not be easy, and depending on your situation, it might take anything from a few months to a few years, but the point is that once you have that plan, stick to it. Reassess every few months, be smart about your choices and understand there is no quick fix. 

Being financially fit isn’t about a high-end job or getting an enormous inheritance. It’s about your habits and understanding your situation and what you want to be in. Chat with a professional who can provide tips and advice for your specific situation.

Everything you need to know about Critical Illness Cover

Hopefully, critical illness coverage, or catastrophic illness insurance, is something that you will never have to use. But unfortunately, the costs involved in a significant health emergency, such as cancer, heart attack, or a stroke, are too exorbitant for a regular health plan. As a result, people often include critical illness coverage in their budget to prevent financial strain and possibly ruin.

What Exactly is Critical Illness Cover?

The average life expectancy increases with every generation. For example, in 1950, life expectancy for men was 66 years and 71 for women. By 2007, that had grown to almost 80 years for men and 84 for women. Part of the increase is also due to the medical field advancing. A heart attack, for example, that was guaranteed to be fatal fifty years ago, is now an event that most patients survive. 

But that does mean that costs have increased and can leave patients with large medical bills. Critical illness insurance covers specific conditions or injuries listed in the policy.

Although life insurance, health insurance, and critical illness coverage are all sold together, they are all very different. 

  • Life insurance is when a sum is paid out on the insured person’s death.
  • Health insurance is paid out for most (not all) medical and surgical expenses and preventative care costs to the insured person, usually at specific places.
  • Critical Illness insurance provides additional coverage that is specified in the policy.
  • Gap cover provides extra protection for those with medical aid. It covers the deficit between the medical aid scheme and the actual rates charged.

All policies usually have terms and conditions, and might require information about your family history and even a general medical exam. Each one covers different ailments, and it is best to chat about this with your insurer to understand all the additional items it covers and what it doesn’t.

Can Choice Mortgage Provide Critical Illness Advice?

Yes, we do. We provide advice and are happy to give you a consultation to answer any questions that you might have about the policies or any concerns you have. 

If you are interested in getting Critical Illness Insurance or would like to chat about the policy in general, give us a call at 01780 480 600 or drop us a message on our website.

How will the UK mortgage market turmoil impact your deal?

The highlight (or low light) from the UK’s most recent mini-budget was the announcement of huge tax cuts. As a result, interest rates have risen, while the pound has plummeted to record lows against the dollar. While the government has since taken a U-turn on this monumental decision, the mortgage market remains quite volatile. 

With the rise in interest rates, mortgage lenders are faced with the challenge of providing products that are both profitable and realistic for borrowers. The Guardian (link: reports that some of the country’s most prominent lenders have withdrawn mortgage deals and removed mortgage products from their offering. 

The current volatility in the space highlights the need for would-be borrowers to consult with independent advisors in order to secure the right option under these circumstances. But in the meanwhile, let’s take a look at what this situation means for your mortgage deal.

The type of mortgage deal you’re on

The extent to which the mortgage turmoil affects you is largely determined by the type of deal you’re on. Fixed-rate mortgages, the most popular option, remain unaffected for now. The interest rate agreed upon from the outset applies throughout the product period agreed. 

Should you not need a new deal, or need to make any changes to your mortgage, you’re good. However, be prepared for significantly higher interest rates should you need to find a new deal. 

Borrowers with variable-rate mortgages, on the other hand, will feel the blow. With the interest rate here directly linked to the Bank base rate, or the lender’s standard variable rate, a variable rate mortgage fluctuates month-to-month. 

At the outset this seems like the more cost-effective (and therefore attractive) option, as the initial interest rate tends to be lower than the fixed rate. But the fickle nature of the markets makes it a very risky option, compounding the challenge of efficiently managing monthly household expenses.

How will this affect first-time buyers?

For one, first-time buyers should take heed of this crisis when evaluating what type of mortgage deal they sign up for. That said, unfortunately, the interest rate hike creates a further barrier to entry for would-be first-time buyers. Both budgets and expectations need to be lowered in order to account for the additional pounds on repayments. 

There’s no way to sugar-coat it; for now, the outlook is pretty bleak, but your best chance at making the most out of a bad situation is to consult with an independent mortgage advisor. You’re in better hands with someone who understands and can navigate these changes, while considering your unique profile and needs.

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Choice Mortgages have provided me with a fantastic consultative service for over 10 years. I've had absolute peace of mind that everything related to my mortgage, home insurance, life insurance and critical illness insurance has been in hand. Nicki and the team have always given me informed guidance and I've had every confidence in their recommendations and products. A first-class service that I wouldn't hesitate to recommend.

A first-class service that I wouldn't hesitate to recommend.

Emma and her daughter