Financial fresh start

Financial fresh start

I love the fresh start that comes with the end of one year and the beginning of another. After all the spending of Christmas, if you’ve got any spare time over the holiday, it can be a productive period for getting your finances in order so you can enter the new year with peace of mind that you’ve given your finances a fresh start too.

It can be daunting to know where to begin. Maybe you’ve never looked properly at your finances before, or it’s so long since you last gave yourself a financial MOT that you’ve forgotten the important principles. I’m going to give you three simple pieces of advice to get you on your way.

Get a grip on your expenditure

This is about getting a handle on your current situation and everyone can do it. Look at your account activity over the course of a month or sit down with a bank statement and work out all your incomings and outgoings. Interrogate everything that’s coming through your account. For example, look at those direct debits, cancel the ones you don’t need or switch to cheaper alternatives if they’re costing you too much.

Then keep tabs on your expenditure every month. The simple act of tracking your monthly spending will almost always save you money. Understanding what you’re spending and what you’re spending it on is the foundation you’re going to build your financial future on.

Work out your goals

Once you’ve got a hold on your day-to-day, month-to-month spending, you can start to look further ahead. Define your financial goals for one year, five years, 10 years into the future. These will be tied in with your aspirations for life. Clearing debt, buying a home, travelling the world, starting a business, becoming financially independent, retiring, giving the next generation a helping hand. Wherever we are in life we can usually point to an aspiration which will involve some degree of financial planning.

By setting the goal you’re being intentional in going after it, changing ‘some day’ into a specific day in the future. It also allows you to work backwards from when you want to achieve it and to set out the steps you need to take from today onwards to get there. As life moves on, our priorities change, so it’s wise to keep these goals under review to make sure your financial plans are still aligned with them and relevant.

Keep your eye on your pension

For many of us, our pension can seem so far into the future that we tend to put off thinking about it in the here and now. But, like all aspects of financial planning, the sooner you engage with it, the more beneficial it’s going to be for you.

If you have yet to get a pension, there is no better time than today to start the process. If you have one or more personal or workplace pensions already that you have acquired over the years, familiarise yourself with the contents by getting hold of up-to-date statements. Your statement will show you how much is in your pension pot and an estimate of how much you might get when you start taking your money out. It will also tell you the type of pension you have.

It is also worth checking your state pension forecast, which you can do on the Government’s website. The amount is based on an estimate of what your National Insurance record could be when you reach State Pension age. This service will also provide advice on how you may be able to increase your State Pension if there are any gaps in your National Insurance record.

So if your fresh start to the year includes a look at your finances, I hope these three simple tips help to get you on your way.

If you would like more specific advice tailored to your personal financial circumstances, please get in touch.

This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.

Past performance is not indicative of future results and the value of investments can fall as well as rise. No representation is made that the stated results will be replicated.

Emily Marland

Financial Planner

Emily joined the company in October 2012 and has over 20 years’ experience in financial services.

Learn more about Emily Marland