Your ultimate money MOT: All the checks you MUST carry out if you want to build wealth in every decade of your life

IMAGINE if you didn’t get your car serviced, skipped the dentist, or didn’t check the boiler for years. Sounds crazy, right? But checking your finances is just as important – and lots of us are guilty of not keeping on top of our cash. Use our checklist to do your own money MOT for every decade. Different stages of life need different financial strategies – use our money MOT so you don’t get caught out Don’t let your finances get out of control – use our checklist to make sure you’re on track Credit: Getty Less than two-fifths of people have a financial plan in place, according to St James’s Place. And, nearly three in 10 adults do not feel financially resilient or able to cope with an unexpected financial shock. Claire Trott, head of advice at St. James’s Place, said: “Having a financial plan isn’t just a one-and-done – it is something that needs to be revisited on a regular basis. Things change, sometimes positively but also negatively, and dealing with these changes in a timely manner can make all the difference, especially in the long term. “Even without significant life changes, priorities can drift or alter, and that will require a change of plan. If you don’t review your finances on a regular basis, the risk is that the original plan becomes irrelevant and doesn’t deliver over the longer term.” In your 20s: set a budget Often find yourself in the red at the end of the month? A budget will help you keep your finances on track Credit: Getty A budget is the basis of good financial planning, so if you don’t have one, now is the time to start. Some 79 per cent of 18 to 21-year-olds do not have a budget, according to a survey from Santander. Your first step is to work out what you have coming in each month, versus how much you are spending. Take away your essential bills – like rent, food and council tax – from your income. Any leftover cash is what you can spend on non-essentials, like takeaways and make-up. Apps can help you stay on track, and there are plenty of free ones. Snoop allows you to view all your accounts in one place, lets you categorise your spending and comes with a weekly spending report. Alternatively, try Plum, which can calculate how much you can afford to save every few days and automatically set it aside for you. Once you nail your budget, start building up your savings. Experts say an emergency fund should cover three to six months’ worth of essential bills. If you are an overspender, wait 48 hours before splurging on non-essentials and start putting away small amounts – like £10 a month – into an easy-access account. The top-paying account is offered by Lemfi at five per cent, though this drops to 3.04 per cent after six months. Alternatively, Cahoot offers 4.52 per cent. Top tip: Open a Lifetime Individual Savings Account (LISA) NOW if saving for a house. Available for 18-39-year-olds, you get a 25 per cent government bonus – £1 for every £4 saved, up to £4,000 a year. The Government is looking to replace it with a new First-Time Buyer Isa, so experts recommend opening one now with just £1. If you opened a LISA at the age of 20 and saved the maximum for 10 years, you would have deposited £40,000 and banked £10,000 in free cash, plus any interest or market growth. Claim your FREE £250 wallet audit (AD) Are you sure your money, savings and retirement plans are on the right track? * If you click on this link we will earn affiliate revenue Don’t let inflation quietly shrink your nest egg. Award-winning independent financial advice firm Kellands Chartered Financial Planners are offering Sun Money readers a free one-hour consultation with their experts worth £250. Let the pros look at your savings, pensions, and goals to make sure your money is working as hard as you do. Secure your free session today Kellands (Hale) Limited is authorised and regulated by the Financial Conduct Authority. FCA Firm Reference No. 193498 In your 30s: make your money work harder It’s recommended to start investing in your 30s Credit: Getty By your 30s, think about investing – it’s the best way to make your money work hardest. However, it should only be used to meet financial goals more than five years away to give your money time to ride out market ups and downs. If you put in £10 a month, you could have £680 in five years having used £600 of your own money based on five per cent growth, according to AJ Bell. Over 15 years, you could turn £1,800 into £2,673. Open a stocks and shares Isa if you do not have one – you pay no tax on money made from investments or when you withdraw it, and can save up to £20,000 a year. A good place to start is investing in a fund – a basket of different investments, including companies, gold and bonds. As your money is spread across different investments, it is less risky and better for beginners. Once you’ve made your investments, it’s a good idea to review your choices and performance once a year, in order to make sure your money is on track. Starting a family? Use the Junior Isa allowance – up to £9,000 each tax year to save for your kids. AJ Bell says saving £40 a month from birth could give your child a pot of £14,770 at age 18, based on five per cent annual returns, having contributed £8,640 yourself. Top tip: Check your savings rate has not dropped since your 20s. With £5,000 saved, an account paying two per cent earns about £100 a year versus around £225 at 4.5 per cent – a difference of £125. In your 40s: Pay down your debt Even if it costs more in the short term, paying down debt can leave you much better off in the long run. Credit: Getty Life gets more expensive as time goes on, with property upgrades and the cost of raising a family. So make sure you haven’t overextended yourself and try to pay down your debt. This could mean curtailing credit card spend in the short term, or paying off any unsecured debt – such as a personal loan you may have used to make home improvements. Paying off a £10,000 personal loan at 5.9 per cent over five years means £1,571 in interest. Pay it off over three years, and that falls to £935 – a saving of £636, though monthly payments will be higher. And do a pension health check. Check how much you have saved and, if there is a shortfall, start plugging the gap by increasing contributions to your work scheme or saving extra in a private pension. If you’re self-employed, it’ll be up to you to set up a scheme. Remember, your pension plan is arguably the most tax-efficient way to save for your future. Top tip: Think about life insurance to provide financial security for dependants. In your 50s: sort out your housing costs Sorting your home, so you are debt-free by retirement, can make a big difference to your standard of living Credit: Getty At peak earning years, review how much is left on your mortgage, and whether you can clear it faster. Sarah Coles, head of personal finance at AJ Bell, said: “In your 50s, if you face the prospect of having to work for longer than you’d like to because you will be paying a mortgage later in life, you can consider paying this down. “However, if you have a manageable mortgage that’s due to be paid off in plenty of time before retirement, it’s vital not to neglect your other financial priorities.” If you want to unlock money that your home may have earned through value increases, moving to a smaller property can reduce outgoings and leave you with a lump sum to help fund your retirement. You are also likely to end up with lower maintenance, energy and council tax costs, as an added bonus. Top tip: Check your state pension forecast at gov.uk. The state pension age will increase from 66 to 67 between 2026 and 2028. In your 60s – future planning for your family It may seem morbid, but putting funeral plans in place can relieve stress further down the line Credit: Getty Consider a funeral plan to take the burden off loved ones. Costs are fixed at the time of purchase, so price rises will not affect them. Options currently on the market start at about £1,600 for a simple cremation and reach almost £5,000, with plans from about £2,600, including a service and procession. While you’re future-proofing, now is also the time to think about inheritance tax (IHT), charged at 40 per cent on estates worth more than £325,000. HMRC is expected to collect £9.1billion in IHT in 2025/26. You can gift £3,000 per tax year and make any number of gifts below £250 to different people. Gifts passed on where you live another seven years fall outside your estate for IHT purposes. Top tip: Make sure your will is up to date and consider Powers of Attorney. In your 70s – start a nest egg Saving money for children can be a great way to pass on your wealth and bypass an inheritance tax bill Credit: Getty Putting money aside for the youngest generation in the family can build financial security for when they are grown up and need to fund university, extended travel or even to help buy their first home. Grandparents might want to invest in Junior Isas for under 18s. There’s also the LISA for over 18s. You can even save a pension for a little one, using a Junior SIPP (Self-Invested Personal Pension). Top tip: Be on the lookout for scams. Be suspicious of unexpected calls or emails, offers that seem too good to be true, pressure to act immediately and requests for unusual payment methods, like gift cards.