Accounting isn't simply for business. Many accountants also offer services to people who want help with their personal finances.
On this page
What is personal finance?
Personal finance describes any money an individual earns, spends or saves for personal use over the course of their life. 'Personal use' includes:
- bills - utility/food
- any luxuries.
Financial decisions, however big or small, can have a significant impact on the direction and quality of life. For instance- without careful planning in the early stages of your life, how will you have enough money to get married, support children, or retire comfortably? Do you have contingency plans for when things go wrong? What if you lose your job? What if your spouse dies? Although it may seem pessimistic to prepare for the worst when life is comfortable, making preparations now could save you a lot of trouble and unhappiness in the future.
Even for those who enjoy a comfortable lifestyle with a steady income, or a luxurious lifestyle with an excessive income, keeping on top of personal finances can make a big difference to life.
Why might I need help with personal finance?
Anyone can benefit from professional financial advice from an accountant. You may wish to consider the following questions: are you...
- Neglectful of your accounts? E.g. do you shy away from budgeting, forget to check your balance regularly, or spend without knowing how much you have?
- A high earner who finds it difficult to keep track of earnings?
- A big spender - do you enjoy luxuries and live beyond your means?
- An impulsive 'here and now' kind of person who tends to live for the moment and ignore the future?
If you answered yes to any of these questions, you may be at risk of losing out financially. How can you make good, calculated financial decisions if you don't look after your accounts? By putting your finances at risk, you are essentially putting yourself at risk of not being able to enjoy, or even experience the momentous occasions in your life.
How can an accountant help with personal finance?
For anyone who feels they need a little expert advice when it comes to money, an occasional meeting with an accountant could prove invaluable. An accountant can advise on all aspects of life, including:
- Changing jobs - All sorts of financial issues can crop up when it comes to leaving one job and starting another. For instance- are you entitled to any moving allowances? And if so, will they be tax free?
- Negotiating salary - It's commonly thought that the ability to negotiate is the key to succeeding in getting a pay rise. How are you supposed to negotiate well if you don't have the evidence to support your argument? An accountant can find supporting evidence to help you win your negotiation.
- Savings and investments- There are so many savings accounts available from a huge range of banks and building societies. How do you know which one is going to suit your needs?
- School fees planning - Accountants can advise on the most tax-efficient way to pay or save any school or University fees.
- Pension planning - If you aren't clued up on the advantages and disadvantages of certain pension schemes, an accountant can offer unbiased advice to help you decide which option is best for your situation.
Accounting help for high earners
High earners are just as prone to bad money management as those on an average or low budget. Just because an individual has a lot of money now, does not mean that they always will. Wealth can be subject to inflation, volatile markets, new taxes and legislation, everyday risks and changes in personal circumstances. If you are a high earner, it is your responsibility to put measures in place to protect your wealth. An accountant could help minimise the impact of unexpected changes by:
- Showing you how to diversify your assets to spread the risk.
- Advising on the best investment products and strategies for a higher return.
- Discuss trusts designed to protect wealth in the UK and overseas. Do you know the difference between a Discretionary Trust, Reserved Powers Trust and a STAR Trust? An accountant will be able to explain the advantages and disadvantages of each option to help you make an educated decision about where to keep your money.
An accountant could also advise you on how to save most efficiently for the future by talking about:
- saving for retirement
- pension consolidation
- income planning to maximise generation
- protection plans for business and family
- advise you on how to minimise future and current tax liabilities.
The cost of an accountant
Many people shy away from hiring an accountant for their personal finances due to the cost. Surely having an accountant is just another unnecessary expenditure?
True, accountants can be pricey, but it is worth considering how much money he or she could save you in the long run. By regaining control of your accounts, ensuring your investments are as fruitful as possible and preparing for the future, you could end up saving yourself significant amounts of money. Booking an hour meeting with an accountant every once in while could end up being a small sacrifice for a substantial reward.
To find out more about how accountants work, the fees they charge and the services they provide, please visit Accountant FAQ.
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