The beginning of a new year is a popular time to make new resolutions but how many of us will actually go on to achieving them.
Our top tips for a prosperous financial start to 2018…
Pull all your paperwork out of your drawers and get on top of your files. Write a simple summary of what you own, what you owe, your regular income and expenditure. This will help you identify any areas needing attention.
Then look at these in categories and ask yourself, ‘Where can I make money? Where can I save money? And what do I need to do for peace of mind?’
* Make money*
- Start saving for the children
Whatever the amount you have just spent on Christmas gifts, your children will cost you much more over the years. Whether its university fees, a first car or a house deposit, children are notoriously expensive.
Saving on a regular basis is one of the best ways to build up capital and provide you and your family with a more secure financial future. Putting a savings plan into action and investing your money in the right way means you’ll be on your way to achieving your goals sooner than you think.
- Start saving for yourself
What’s right for your children is likewise true for yourself. If there’s something you are specifically saving for or whether you simply need to save for a ‘rainy day,’ the sooner you start to save, the easier it is to reach your target. Use our handy budget planner to establish how much disposable income you have each month and make a commitment to save in 2018.
- Review your investments
With interest rates remaining at record lows of 0.50% and inflation reaching 3%, is it time to review the deposits you hold with your bank or building society?
If the rate of inflation is higher than the rate of interest you’re receiving on your cash ISA savings account, the value of your money will be eroded over a period of time. So retaining your cash ISA may not be the risk-free option you perceive it to be.
It is possible to achieve a higher return on your investment, by investing into a stocks and shares ISA that will provide you with the same tax advantages while growing the value of your savings and with the potential to keep ahead of inflation.
Since their launch in 1999, the stock market has outpaced cash ISAs by 38%. Our advisers will tailor the amount of risk you are willing to take while making your money work harder for you.
* Save money*
- Review your mortgage
Your monthly mortgage payment is usually your highest monthly expense and making sure that the interest rate you’re paying is competitive should be high on your New Year to do list. We appreciate that the thought of moving your mortgage is often perceived as a big step and sometimes simply ‘not worth the hassle’. Mortgages can be transferred easily between providers and in some cases will cost you nothing, meaning that savings can begin immediately. So you may have nothing to lose, but everything to gain!
- Plan for a prosperous retirement
Retirement means different things to different people. For some, it’s a time for relaxing or taking a well-earned rest after a busy career. For others, it’s an opportunity to travel, spend more time on hobbies or to achieve all the lifetime ambitions still left on their wish list.
Many people have different pensions with different providers and despite many government initiatives focused on simplifying the system, some still don’t have an accurate idea of how much is in their pension ‘pot.’
Good pension planning is impossible without knowing your position. You then need to have a clear plan of how you’re going to achieve your retirement goals. For example can your separate pension pots be brought together and simplified? Speaking to an Independent Financial Adviser is the first step in this process.
Gift now to save later
A programme of lifetime giving is an effective way to reduce your estate’s exposure to Inheritance Tax (IHT). Gifting £3,000 each year to the next generation will immediately save IHT on your death, regardless of how long you survive. This annual exemption can only be carried forward for one year, so if you have made no gifts in the previous tax year you can gift £6,000 in the current year and this gift will be immediately exempt, but if you wait until after 5 April to do so the earlier year’s exemption will be lost.
*Peace of mind*
Protecting what’s important is an absolute priority. You probably don’t even realise all the steps you’re already taking to protect your family because it is second nature to you. For example, holding your child’s hand to cross the road or applying sun cream on the off chance it will be a nice day. You do what you need to do, when you need to do it, to help keep your family safe.
Most of us have car insurance or home insurance because it is second nature or a legal requirement. Nowadays a number of us even insure our electrical appliances. But have you protected your family in case the worst should happen? Insurance is something no one likes paying for but if you insure for what can go wrong, you can then invest for what can go right.
Family protection cover can protect anything from critical illness cover, to life insurance and income protection. This protection means that when you suffer a loss of income, your finances remain in control and the least of your worries.
By taking action now you can help to remove or reduce the financial burden that can make a stressful time unbearable.
We will help you to prioritise and decide which levels of protection are most suitable for you whether you are single, married, have dependent children or older children who have left home, there’s a solution for everyone.
Lastly but by no means least, if you are one of the many people who have put off the apparently onerous task of writing a Will, the New Year presents a great time to sort this. While the thought of contemplating your passing and clearly documenting your wishes may be unpleasant, it does prevent much greater upset and distress for your loved ones in the future and removes the consequences of dying ‘intestate’ (without a Will).
Discussing your financial needs with an expert can make managing your finances simpler. To get your finances in tiptop shape in 2018, arrange your FREE review by calling 01228 711881.
Posted: December 31st, 2017