Financial new year's resolutions — planning for the future

It’ll come as no surprise that these are common New Year’s resolutions.

In fact, Statista data from November 2022 show exercising more and saving more money were the most popular answers among those surveyed, with other customary answers such as quitting smoking, reducing spending and losing weight also in the mix.

As we all know though, making a resolution is one thing. Sticking to it is quite another, with YouGov saying three in 10 (31%) of those who made resolutions for 2021 claiming they’ve kept all of them.

Best of intentions

Professional support and guidance can make all the difference: giving you the motivation to stay on track.

In the same way you might enlist the help of a personal trainer to help you achieve your fitness goals a financial planner can do the same when it comes to money matters.

Saving more money?

Let’s look at the resolution to save more money.

If that’s one of yours, are you thinking about literally transferring more from a current account to your savings account? Or is it more than that?

It’ll come as no surprise, as a charted financial planner, that I’d recommend people look at a full financial plan.

Why?

Having one in place means you’ll have a better chance of achieving your goals: ensuring you’re more likely to have the money you need, when you need it, to live the life you want. That might mean you’re well placed to help a child buy their first home; maybe you’re looking to retire early; or you’re keen to have funds in place to start a new business.

Looking at your finances long-term has always been important, but it's essential now when we’re all paying more than we were a year ago for so many things.

The process involves working with your planner to finalise your goals, discuss your financial situation, and your feelings about risk. They’ll consider any existing plans you have and whether they’re working well for you.

Other areas a financial plan might consider are —

• Protection — This type of insurance can provide valuable financial protection if you become seriously ill, are unable to work or — worst case scenario — you die. It's well worth considering, especially if you have family or dependants

• Savings — We refer to this as an emergency fund. If you can, it’s worth keeping money in reserve to use when you need it, for example home repairs or family holidays. It’s important to know how much you’d ideally have saved and where to keep it

• Pension — Anyone who has paid National Insurance (NI) in the UK for at least 10 years will have some entitlement to the state pension. You’ll receive the full pension (which will rise to £203.85 per week, or £10,600.20 annually) if you’ve paid NI contributions for 35 years. If you’re employed, you’re likely to be in a workplace pension but beyond this, it’s worth looking at a personal pension as well. And, you’ve guessed it, the earlier you do this the better, as it can make a huge difference to what’s in your pension pot when you retire because of compound interest. If, over the years, you’ve contributed to a few pension schemes, we can help identify and review these so you don’t lose out

• Investment — This is where you outlay money for income or profit over a period of time. Everyone in the UK has an ISA allowance of £20,000 for the 2022/23 tax year. These accounts are always a good starting point for investments as you can withdraw money tax-free

Other considerations

Other areas of financial planning to think about are tax planning (including inheritance, income, or capital gains tax), as well as mortgages and releasing equity from your home.

The process

Financial planning starts with a no-obligation meeting to learn about you and what is important to you, before going on to discuss your finances and existing plans in detail so that we can ensure that any plan we build is suitable.

Please get in touch if you’d like to discuss and watch this space for more on financial matters.

Ledingham Chalmers Financial Limited is authorised and regulated by the Financial Conduct Authority. FCA number 196274.

Figures are correct at time of publishing but are subject to change.