Rihanna is a successful 31-year-old singer, actress and fashion designer.

Despite having earned a significant amount of money, by 2010 she was $9 million in debt and on the brink of bankruptcy. Rhianna then sued her accountant, Peter Gounis, for giving her bad advice, saying that he failed to advise her against buying a home for $7 million when her cash position was precarious.

When you’re in a social situation and meet new people, the most common initial question is ‘What do you do for a living?’ 

The job question seems innocuous, inoffensive, and uncontroversial. But really it is about the other person subconsciously working out their status compared to you and whether you are below, above or on a par with them.

Life has a habit of throwing you curve balls. Some of those curve balls relate to money. Whether it’s your car needing repairs having failed its latest MOT, a school trip that your child forgot to tell you about, or the washing machine finally giving up the ghost, unexpected expenses often arise when you can least afford them.

A few months ago I started looking to buy a car.

A bit of research showed that the price of the make and model I wanted ranged from £18-32,000 depending on model, age and mileage. I set a budget of between £20-25,000 with the aim of trying to spend at the lower end of this range.

Sometimes we waste money by buying things that we either don’t need, or get little benefit from, or that don’t last, or that don’t add to our wellbeing. Sometimes it’s all these things.

But sometimes it’s good to ‘waste’ money, and that includes buying human insurance that you never make a claim on. Human insurance is an insurance policy which pays out if you can’t work due to illness or disability, or you get a critical illness, or you die.

Learning to control your day to day spending is the essential foundation upon which your financial wellbeing is built. My Smart Spending System introduced the simple concept of the THREE YOUs and using separate accounts to quarantine money for those different priorities, as shown in the diagram below.

Being good with money means different things to different people but at its core it means not worrying about it, being able to enjoy life now and having financial security when you can’t or no longer wish to do paid work.

 Ten planning actions to consider before 6th April 2019: 

TAX FREE SAVINGS: If you are aged 18+ you can invest up to £20,000 into cash, fixed income, equities and alternative investments through Individual Savings Accounts. If you are aged 18-40 and never owned a property before, you can invest up to £4,000 into a Lifetime ISA. If you are aged 16+ and never owned a property before you can invest up to £1,200 followed by up to £200 per month for five years into a Help to Buy ISA. Anyone under 18 can have up to £4,260 per tax year invested in a Junior ISA in cash or stocks and shares.

Barely a day goes by without something in the media or online about the financial challenges facing young people. Whether it’s the spectre of leaving university with massive student debt, the high cost of housing, or the impossible task of saving for older age, the narrative is the same. A sense of unfairness, future hardship and impossible barriers to high financial wellbeing.

When you are faced with what looks like an impossible task, it’s easy to get overwhelmed and feel powerless to improve your situation.

If you’re not yet financially independent, and you have dependants, you’ll need to ensure that you have enough life insurance to support them and to repay any debts if you die prematurely.

A policy which pays out a lump sum is usually best to pay off any debts like a mortgage. If you are an employee you might have life insurance provided by your employer, known as ‘death in service’ benefit. But if you don’t have such cover, or it isn’t enough for your needs, or you are self-employed you’ll need to take out extra life cover.

How much of your monthly income do you spend on living?

Beyond the essential living costs like housing, food, energy, clothes and transport, there is also likely be the ‘extras’ that make life both comfortable and enjoyable, like socialising, hobbies, designer clothes and holidays.

Where some people get into a problem financially is that they spend too much on the lifestyle ‘extras’ so they never manage to build much in the way of a short-term cash reserve or long-term wealth.

In summer 2015 I purchased a new Ford Fiesta car for £11,500 cash, to use for local trips and also for my eldest daughter to learn to drive in.  We have been very pleased with the car and have kept it in good condition.

I was recently contacted by the local main dealer who supplied the car, suggesting that they could offer me a great deal on a new Fiesta, at a slightly higher trim level than our current car.

Out of interest I asked the dealer to let me have his best deal, including taking my existing car in as part exchange.

Many people dream of winning the lottery and receiving a life changing lump sum. But large lump sums can also arise from winning on Premium Bonds, negligence compensation, redundancy, sale of a business or, most commonly, from an inheritance.

But while receiving a financial windfall might sound appealing, making good financial decisions can be a real challenge for the recipient. The media is full of stories of lottery winners who ended up penniless and lonely within a few years, or a business owner who slipped into depression within a few years of selling their business.

Over the 25 years that I was in practice as a financial advise, I conducted discovery interviews with several hundred people, where they told me their personal story. I have also had the privilege to hear the personal stories of a similar number of professionals from the fields of financial planning, investment management, law and accounting. On top of that I have read literally hundreds of biographies of political, business, scientific and charity leaders.