Another year has been and gone, and we’re at the beginning of 2018. Who knows what this year will bring – your guess is as good as mine. We could have a “big red button” war; it could be the year of the cryptocurrency taking over the investment market or equally possible, taking every investor out; or it could be another year where there’s a lot of talk but not much happening.
Away from the financial world, we’ll have the Winter Olympics in South Korea in February, the Year of the Dog when the Chinese New Year comes around, a Royal Wedding in May, a football World Cup in the summer, and if you’re really keen, get planning for Black Friday on 23rd November! Politically, there isn’t too much planned for the year; some more Brexit chatter ahead of the big date in 2019, maybe our Northern Ireland politicians will form an assembly and hopefully Donald Trump and Kim Jong Un can control themselves. Apart from that, same old same old.
January can be a depressing time of the year or it can be when we are most optimistic – it completely depends what you have planned. If you aren’t on top of it all, here’s 5 things to think about just to get you started.
Review Old Goals and Set New Ones
I talk a lot about setting goals – both personal, professional and financial. Review how last year’s goals went and if you met them, brilliant! If not, keep them in place and see if you can get there this year. Make sure to keep pushing for bigger and better things, but remember to keep them SMART! They must be Specific, Measureable, Agreed, Realistic and must have a Timescale.
Assess your current situation
Has your pay changed since last year? Have your expenses changed? Are you building money up, or losing it? Maybe you’ve been planning for a wedding, maybe you’ve taken another step up the career ladder or maybe your setting out on the journey of parenthood. All of these things, and many more, will have an impact on your income and expenditure so make sure you still aren’t spending more than you earn.
Take a bit of time to review any debts you still have. Whether it is an overdraft, car loan, credit cards, mortgage or the finance plan on your new sofa, is it costing you money? Would you be better off getting it cleared as soon as you possibly can? You might consider a balance transfer card with a 0% moving fee if that would help any credit card hangovers from Christmas?
Have you sorted your back up plan? What happens if you are between jobs for a while, or if you’re sick and can’t work? Have you something in place? Or if you’ve moved house this year and taken on a bigger mortgage, did you review your mortgage cover? If something serious was to happen, could your family and loved ones still get by? Do you have a will and is it up to date? It’s never a nice thing to think about, but it’s much better planning ahead than having to sort it out after the event when there are a million and one things happening all at once.
Plan for life after work
Have you started saving into a pension with work? If not, why not? Maybe you could look to increase the contributions, and if so, chances are your employer will match it. Almost all companies should be offering workplace pensions by now, only the newest companies won’t have had to introduce one yet, but they will by April. Another thing to remember is your current contributions will have to increase in April from 1% and 1%, to 2% from your employer and a 3% personal contribution.
Planning for your future
With your own savings, are they still appropriate for you? If you’re a prospective first time house buyer, have you opened the Help to Buy ISA or Lifetime ISA depending on which one is most appropriate? Have you been using your ISA allowances? Should you be looking at starting up a longer term savings account, and if so, maybe you should be thinking about investments? A stocks and shares ISA is one of the easiest ways to do this, but you need to know the risk you are taking with your money, and be sure that if it does drop in value in the short term, that you aren’t relying on that money for something in the next few years.
Our clients can log in to their online account and complete their own financial review which will touch on these, and then we can suggest changes to your plan if needed.
There are many different areas that a financial planner can help with, we aren’t “the insurance sales man” your parents probably moaned and warned you about. If there’s anything here that you feel you would benefit from talking to someone about, please do let us know. Even if you think you have everything under control, perhaps getting a second opinion from someone who isn’t emotionally attached to your plans would be of benefit.
The most important thing is that you have a plan. Whether you have a rough idea of where you are heading, or if you’ve built a spreadsheet down to the last detail, taking some time to sit down and plan it out will give you the encouragement to make it succeed!
So here’s to a happy new year, and hopefully a successful one at whatever you are aiming for!