Overwhelmed and wasting my opportunities

[MoneyMinimiser]

I am constantly messing up e.g. tax deadlines, have no proper records to speak of and have most of my money sitting pathetically in a current account.

The last few years have been financially kind to me, with inheritance and job promotions and such - but the associated grief and over-work and pressure of becoming the person that the extended family approach for money has brought me to a point where I’m financial the equivalent of the kind of house that Kim and Aggie hold their nose at.

There is stuff there – but it is just in a complete mess. I am overwhelmed by it – which just makes me more avoidant.

The inheritance came with some conditions attached for what it should be used for in the medium future - which together with inflation just makes me feel horrible about not managing it properly. Add in guilt for having assets in a cost of living crisis.

I am not against paying for somebody to help me – but even there, I feel like I would just be walking in with “mug me “written on my forehead … and I don’t so much need advice about exciting investment opportunities – I need help with organising myself - I need hand-holding to help me ‘grow up’ in my attitude to money.

My bank had a service called ‘Money Mentors’ - but in the photos, they all looked about 25, and like it was set up to help young people starting out in life. I just think I would seem like a crazy person if I brought in the piles and piles of papers that is me.

In my regular life, I found things like FLYLady helpful for keeping on top of the chores. I am numerate/ literate / don’t particularly have issues with overspending – just haven’t stepped up my skills as my financial situation has become more complicated.

@MoneyMinimiser is there any chance you could buy a health insurance policy in the relevant country for your relative and let the insurance people sort it out?

Sounds like the kind of situation where it would be worth paying to offload the risk.

We were in a similar situation OP and this is what we did.

Wills first. Get a solicitor.
Pensions second. Get a pensions adviser to bring all the bits and bobs you’ll have had over the years into one proper pot.
Your tax position. An IFA will tell you where to put what so you’re not paying over the odds.
Then investments. They’ll ensure you’re maximising your ISA allowances etc and then recommend investments based on your preferences (eg ethical investing, risk level)

Once everything is in the right places it’s just maintenance keeping it all ticking over.

Oh yes and life insurance, don’t forget that!

@Aria999 - it’s a ‘dodgy’ country. Half the bills need to be paid cash-in-hand. It’s my birth culture - but it honestly does my head in.

Pensions - I’m 35. I have an occupational pension - but it hasn’t been on my radar beyond that. Getting the kids through uni feels like a bigger worry (I have 17 year old twins, one of them looking at medicine - and then a younger child coming up too)

Have very very good life insurance but no will (should fix that)

@OwwwMuuuum How do I find an IFA who is an much of a therapist as a financial guru? And trustworthy both financially and in terms of sharing personal stuff with.

We got ours through personal recommendation, do you know anyone local who you’d ask for a recommendation? Are you UK?

And our mortgage advisor (linked to our IFA) was definitely a therapist as well as a number cruncher, haha!

I find things like this MIND BOGGLING. I had a great accountant who would offer advice (I'm also self employed) and he's known me for years, but he retired last year and I'm now managing it by myself as much as possible. It's a total minefield!

Your financial position sounds more complicated than most. If I were you, I would think of selling some of it if only to streamline and simplify it.

Before you do that, before you can even approach a financial advisor or an accountant, you need to organise your paperwork because they will throw a whole bunch of questions at you at the start. You are going to need to pull all that up for them before they can even begin to help you. There is no getting away from that. I find that is the most time consuming part of getting advice and kinda defeats the purpose of the advice a bit because feels like you have done most of the leg work.

For all of your finances, you should create a spreadsheet to list what you currently have. You should also list your expenses because you will only be able to invest the excess after you have paid expenses. An easy way to get that information is by going through my bank statement direct debits. I can see my energy bills and credit card outgoings over a period of say, 6 months, to work out a monthly average.

For things that have paper statements, get a folder (or box) to throw them in when they come through the post. Something like this www.amazon.co.uk/Rapesco-1622-Expanding-Organiser-Oversized/dp/B08KFLYCRT/ref=sr_1_3?th=1

Put electronic mail into an electronic folder.

List all of it in the spreadsheet, including the name, account number, account balance.

Then after a few months, you will have built up enough of an understanding of where things are to be able to provide information to the advisor.

A ha ha - yeah @blueshoes - it’s the paperwork equivalent of feeling cornered into finally tidying up because you have a cleaner coming.

Thank you for the how -to step by step.

Weirdly I feel a bit validated to hear pp say that I’m not just crap at paperwork - that it’s ‘a lot’

I tend to get intensely into for a day or two - and then just shove it away when ‘real life’ demands take over - to the point where I can barely remember what’s what.

Some of it is paper, some is electronic stuff that I’m sent, some of it is electronic stuff that is hiding in weird online portals, some of it is handwritten notes transcribed from phonecalls …. some of it is actual expenditure … some is likely long term liability … some is paid ahead or in arrears …. … it’s all ‘there’ - but very chaotic.

I don’t know how to … just make it … sane .

If the £80k is earmarked for your relative's care and you have no way to predict when the medical expenses will come, you would be better off sticking it an instant access savings account with a good rate and then forgetting about it until needed.

Investing the money is generally only worth it if you can commit for the long term.

it’s the paperwork equivalent of feeling cornered into finally tidying up because you have a cleaner coming.

That is a good analogy 😆

One thing to watch out for is once you got your info together, see that advisor asap because otherwise that spreadsheet quickly goes out of date and then you have to start all over again. So once you start, you have to force yourself to continue until you got a result.

A bit like going into labour and then giving birth!

ISAs haven't been worthwhile for most people for years so only look at those if you are a HR tax payer and have investment income of over £1000

There we go, about 3 replies in and someone writes utter misleading rubbish.

please take some advice. A Chartered IFA (not St James’s Place who will asset strip you), best bet a woman, can guide and help you. Get 3 names and speak to each of them

Please do not take advice off this site, so much rubbish is written, this stuff needs context and planning. Opinions are dangerous and misleading.

I was kind of of that mindset myself @NotDavidTennant - but the inflation crisis/ depreceating value of sterling has upset me in how it has eroded the buying power of the bequest (i.e. it felt very generous at the time - but the rate that things are going I’m worried that it will barely buy an egg and cress sandwich when it is called on).

Which I guess is the kicker about inflation

But it’s made me feel pressure to suddenly become an investment guru and find some kind of inflation proof vehicle for the earmarked funds. (in fact - I did convert 5K into dollars - but thought of it too late for it to be an effective hedge).

Interview them. Get personal recommendations and use a Chartered Adviser.

Women are usually better than men.

@Sunsetintheeast - how much would I be spending in fees with someone for it to be worth their while to be interviewed by me?

I would like a trustworthy expert - but paying out feels for mansplaining (or indeed womansplaining) feeds into the anxiety of how quickly what initially felt like a large amount of money can just vanish.

And I feel that 9 professionals out of 10 will tell me that my life is bonkers. Which is true. But it would hurt my feelings.

Hi OP, I think getting an accountant might be good but if it's literally piles of paper then how about a bookkeeper in the first instance?

I have a friend (retired now) who was a bookkeeper; she used to charge £15 an hour to go to people's houses and do their financial admin - tally receipts against bank statements, make the spreadsheets, do the maths for the tax returns, pay invoices, etc etc.

If you have a small business then this might even be a tax deductible expense?

It's more cost-effective and hands-on than an accountant, as I understand it, which might be what you need?

Then when the minutiae is more managed/manageable, you might have the headspace to make those big picture decisions?

You'd have to find someone you trust - ideally find a word of mouth recommendation I guess? - but also there is an Institute with code of conduct so someone who is part of that would likely be very trustworthy.
www.bookkeepers.org.uk/Membership/Ethics--Regulations/Professional-Conduct-Regulations

Best of luck.

Please go onto your bank’s website and read what advice they give about avoiding investment scams.

Please ensure any company you use for advice or to invest with is registered with the Financial Conduct Authority.

I deal with investment scams for a bank and a lot of people don’t due their due diligence to carry out proper checks on the people they’re taking advice from.

Don’t trust anyone who wants you to download an app onto your device which gives them remote access.

And I’m begging you, don’t waste your money on cryptocurrency. You’d be just as well burning your cash.

Any initial meeting is usually at their cost so you wouldn’t be charged for that. You need to drive this, not them.

Any fees should be proportionate, but you might find someone you like and talks sense that will charge an hourly rate for advice.

It depends if what you really need is order (accountant), or advice: IFA.

To be honest, that’s what most will say. Unless you can timeline some for > 5years, they won’t touch it.

This is very good advice. But if you are totally overwhelmed, consider these modifications:

Will: if you were hit by the proverbial bus tomorrow, who is in the picture? husband? second marriage? step family? If married, you must get a will, in case husband re-marries after you are gone then leaves everything to his new wife (it has been known to happen).

If it is just you and you are either fully divorced or never married, then if you died without a will I believe everything would simply be split between the three children - but this would not protect your relative's money. Given that you can't leave the cash to the relative, you would be looking at a trust or similar - which is way to complicated to fret over just now. When you do get around to sorting a will, beware of any arrangement that means paying solicitors a 'management' fee for years to come for the relative's pot.

Living will: what if you were in a coma? what if you get dementia? what are your wishes? - again, no rush (fingers crossed) but have it in your mind to get to this, and have conversations with your children about the possibilities.

Then sorting the chaos: get everything onto the computer - scan paper documents and type up scribbled notes onto Word documents. Take attachments off emails to save in folders. Log on to portals and download files to save in folders. Ensure everything is in labelled folders on the computer, ready for when you want to look at it properly.
Make sure your children will know the passwords to everything if you die - this is part of preparing a will / living will.

Relative: put "their" money aside in two new separate accounts - one for quick access to pay bills that might crop up in two to three months, and one for longer term with a month or three month's notice of withdrawals, to get better interest. Don't make it complicated. Yes you could consider various investment options, but you don't have the mental head space to worry about it just now.

Pension: you need to look after this. It is a priority. You can't put the kids university before your pension.

Business: If you are generally overwhelmed by your business paperwork, get a book-keeper. This is much cheaper than an accountant if they are just putting all the numbers together into accounting software for you and tidying the invoices. You need to have tax returns done and know your earnings for the next step - which is Uni costs.

Uni: the system should tell you how much you are expected to contribute based on your earnings - get the kids to do all the necessary research and paperwork, it will be good practice for them.

Then take a deep breath and get some counselling to help sort out your emotions before worrying any further about money.

Then the rental flat: just sell it if you don't want to be a landlord. You don't need the hassle. Don't fret about whether it is a 'good' time to sell, just do it.
Or, decide you will give it the headspace it needs, that you will be a proper landlord and commit to it. Make a decision.

Then finally get an IFA to help you with tax and investments, if you think the amount of money you own is worth paying their fees. If the fees are too high, maybe just do your own research in your own time, without feeling guilty about whether you are squeezing every penny to work to the max. There are more important things in life.

You can get a will done relatively easily - just search for wills locally. There's also a lady recommended on here sometimes who I'm sure someone will mention soon (maybe Marlow wills?). Saves dumping your kids in this kind of predicament too, especially if a solicitor can execute it.

For the investments, my policy is bung it in an ISA as much as you can each month until it's all in there. I found vanguard easy to set up and it's fun looking at the graphs online. Can also just remember you on your computer and whatnot so, again, simple.

I think I'd be looking at health insurance for the relative given its unpredictable.

What a mess you've been handed, hope you get sorted soon!

As you're under 40 you can also open a lifetime ISA (Lisa) and the gov top up each year. You can only pay in £4000 each year and they add 25%. You can add to it till you're 50 but can't access till you're 60 but you can invest in shares or into funds if you want to forget about it.

The £4000 is part of the £20k annual limit so you could then only put £16k in another ISa but after the 4 years you can transfer from the ISa to the Lisa to get the 25%.