AXA Avenue

Insurance company AXA conducted a unique financial social experiment beginning in November 2005. The goal was to discover if access to professional advice and increased knowledge about financial planning could improve a person's financial well-being.

Working with 20 households in a Brighton community, half were given access to an Independent Financial Adviser for a year while the other half were left to their own devices. Over 12 months the IFA took participants through three key stages: managing debt, short and medium term savings, retirement planning and, in some instances, investment management. Visit the AXA Avenue website for the full story. The conclusions, briefly summarised here, were fascinating.

• Give it time: Spend 15 minutes a week reviewing finances.
• Keep it simple: Make a list with only two columns: what comes in and what goes out. Make sure the second column totals less than the first.
• Find a financial buddy: someone to talk to who can encourage and motivate change.
• Consolidate debts: know the total extent of any debts, the interest being paid, when the debts will be paid off and take action. (Real caution should be exercised when considering any consolidation loan, especially if secured against your home. Take good independent advice).
• Clear debts before saving: the interest paid on debts will be greater than what is earned on savings.
• Think long term: make sure there is provision for the future; understand your pension scheme and take advice.
• Take control: make the decision to be in charge of finance. The right mindset is half the battle.