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Do you need a financial MOT?

Piggy bank with plasters

Are your finances fighting fit and raring to go or poorly and a bit under the weather? If you’re unsure what diagnosis to give your money situation, maybe it’s time to have a financial health check…

A new service called The Money Advice Service launched last week. According to the blurb, it provides unbiased, free financial advice to UK consumers.

Established by the Financial Services Authority (FSA) and funded through a levy on industry, it aims to help people get their finances in order.

Feeling the financial squeeze

And it’s rather well timed, judging by some rather depressing headlines and statistics on the squeeze on household finances of late.

The Office for Budget Responsibility recently predicted that families will be taking on more and more debt to make ends meet. High inflation coupled with an unexpected fall in UK GDP and a rise in oil prices is likely to squeeze household disposable income in the coming months.

So it’s a good time for us all to be assessing our finances and figuring out how healthy they are, and how resilient they would be if hard times hit.

A key part of this service is an online ‘Financial Health Check’, soon to be relaunched. A bit like an MOT, it’s a tool that asks a series of questions to establish your financial situation and then suggests a course of action.

Do we need this kind of service?

But will the recommendations help? When I tested it out, I found them to be fairly high level but useful. Although my finances are ok, it told me to think about life insurance and a will.

Being in my twenties, these are two things that I hadn’t particularly thought about before – something I probably have in common with lots of other people my age – so a gentle push to put them on my to-do list can’t hurt.

This service aims to revolutionise the way people think about and manage their money, but will it be useful to you? Is a high level nudge in the right direction what you need to improve your finances, or are you past the point of looking for basic advice?

Education is better says:
17 April 2011

Surely it would be better to have a class on general life skills such as budgeting in secondary schools? That’s something all would benefit from and might help tomorrow’s children grow up to understand that credit is never free and must be paid back some time.