Now’s the best time in the cycle of the Year to get your finances sorted. And it may be the best Resolution you make
It’s that time again. You went a bit mad on the credit card being Santa pre the 25th, you ate your body weight in cheese in Twixmas–but as the last echoes of Gavin and Stacey: The Finale fade from your consciousness, you turn back on the email and get set for The Madness once again.
As ever, you’re mentally bolstered by all kinds of good intentions—from weight to fitness to finally stopping doing X for an hour before breakfast, committing to being ‘present’ with loved ones and not always checking how your Fantasy Football Team is doing: you have a smorgasbord of excellent NYRs, New Year Resolutions.
I’m glad you do. But I’m going to have to be your dad for a second here and point out the one NYR you haven’t added: the one about sorting out your finances—which is as important to you and your family as you getting back in shape and beating off the prediabetes.
Because, as George Bailey learns every Christmas Eve, life is short and what you do—and in this case, maybe not do–has an impact. Yes, we’re living longer, which is as wonderful a gift as George got, but paying for it is going to be harder than it was for your Baby Boomer parents. In an age where final salary pensions and a dependable NHS are starting to go the way of clutches in motor cars and Brylcream, that means looking after you and yours is basically down to you.
Even the smartest and most organised people who know this and may have a plan in place could do with a check on their assumptions and finding out the latest best practice on building a secure financial future. That’s why January–and ideally right now, before your diary gets too full with work Zooms and client meetings—is the perfect time to book a financial planning session with your Independent Financial Adviser.
Here’s another incentive: what if this was the meeting that helped sketch out the way that there’ll be a January in the not-too-distant future where you don’t need to go back to work after Christmas—and if you do, to work on your terms, as much or as little as you want?
The Seven Questions you want someone who cares to help you answer
Sounds like I’ve been drinking too much Yule spirit? The honest truth is that you can’t get to where you want to be without a plan. Do you want to be the 65% of people who die without life insurance to help their descendants, or the 40 million Brits who go into the great Overdraft in the Sky without a will? After all, the ONS says no less than one in 20 UK deaths happen too soon or could have been avoided.
True, and facts that must be faced. But these are the negative reasons to come and see me that are far outweighed by the positives—agreeing on the steps that could maximise your financial security and freedom going forward.
Just think for a second, if on a sit-down or a videocall with an expert what it would mean for you to get the answers to:
- Am I on track to stop work when I want to? Could I even put the steps in place to make work a choice? what would I need to make that achievable?
- I pay too much tax anyway, but are there any easy tax wins that I missing? (for example, pensions allowance carry forwards, ISAs, using my spouses allowances?),
- Have I invested in the right way to make my life goals happen, e.g., have I the optimal cash/bonds/stocks and shares ratio? Am I taking too much risk with my investments?
- Do we have enough protection in case the worst happens and avoid leaving the kids or grandchildren in the shtuck?
- Am I paying the lowest possible costs for my investments—or am I just helping to send my fund manager’s children to private school?
- Where are we on debt? Are we paying too high an interest? Does it make sense to pay it off? If the interest rate is in the high 4s or 5s then probably, but let’s look at the liquidity you need now and get the right balance
- Where are we on leaving a legacy or gift for my children later in life? Will I have enough for that? What is best for the mid and long-term there?
Get the data to see the future that bit more clearly
And so on. There will be questions like these but also ones directly appropriate to your life circumstances that no amount of Web surfing will answer. So, talk to an expert who can run through your specific numbers, wants to hear your individual rest-of-life vision and can create a plan to make it happen.
I’d love to think we could do both the health, fitness and social media detox stuff AND getting our finances in order at the same time.
But be real with yourself for a second: if you don’t do this now, when you basically have a clean slate before the madness of the full year kicks in—when WILL you do it?
So, get a grip on your future. At the very least, find out if you have some options.
Knowing you have enough or could have enough if you do x or you may be more important than actually having enough, in terms of your New Year, New You.
So short of a Guardian Angel popping down, the only way to find out is to construct your own bespoke financial plan with a financial adviser—and there’s honestly no better time in the cycle of the Seasons than now.
The email to write after you join the gym is the one to me to see if we can make what YOU want to happen.
Happy New Year!
- The value of investments and any income from them can fall as well as rise. You may not get back the full amount invested.
- The favourable tax treatment of ISAs may be subject to changes in legislation in the future.
- This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
- The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested.
