5 helpful financial tasks to help you make a positive start to the new year
December is often lauded as the time for introspection and taking stock of the past year. January, however, typically means new beginnings, actioning change, and starting the new year with a fresh outlook.
When it comes to your wealth, crossing the t’s and dotting the i’s now could set you up for a more financially successful year. Narrowing your focus and working on tasks that serve your “big picture goals” could be particularly helpful with this.
Here are five helpful financial tasks to help you do just that.
1. Assess your savings and investments to ensure clarity for the year ahead
Reviewing your savings and investments is a crucial first step in proactive financial management. Begin by assessing the current performance of your existing savings, and check the latest available interest rates to ensure you’re seeing a competitive return.
Furthermore, if you have large sums in cash savings accounts, your money may not be working as hard as it could be. Though savings rates have been higher in the last few years than in the period between 2008 and 2020, your money could still be growing at a slower rate than inflation.
With this in mind, it may also help to consider investing a portion of your wealth or expanding your existing portfolio. This can help your wealth to keep pace with inflation over the long term. I can help you evaluate your investments and check whether they’re meeting your expectations and aligning with your long-term financial goals.
Ensure you have a clear picture of what you want to achieve, not just for the year ahead, but for your financial future, and talk to me about how you can best put your money to work.
2. Review your budget and make adjustments as needed
As part of your savings and investment strategy, ask yourself if there’s any room in your budget to put some extra money away.
Reviewing how you spent your money in 2024 can help set you up for new habits in 2025, giving you a clearer picture of your spending patterns. This could make it easier to establish or revise your goals based on your current income, expenses, and financial priorities.
Regularly checking in on your budget can help you stay on track for the year ahead. This could make it easier to adjust as needed, based on changes in your income and financial goals.
3. Make sure you have the most suitable financial protection in place
Though you may have a rainy day fund and financial protection already in place, the start of the year is a good time to review your existing financial buffers and ensure they’re still suitable for your current needs and circumstances.
For example, NatWest recommends having 3 – 6 months’ worth of living expenses saved up as a safety net, but if you’ve had a change in income recently, or your expenses have increased, it may be worth reviewing your pot.
As you’re checking and organising your budget, tally up your total expenses to obtain an accurate idea of what you could need if you had to take time off work unexpectedly, or if an urgent home repair came up out of nowhere.
While you’re at it, check that your income protection, critical illness cover, and life insurance are still appropriate for the level of cover you’d require if something were to happen.
If you don’t have protection in place, it may be time to consider what could happen if you were too ill or injured to work, or if you were to pass away and your family had to continue paying the household bills without your income. Knowing your finances are secure should the worst happen can provide invaluable peace of mind.
4. Check up on old pension pots
According to the Department for Work and Pensions, participation in workplace pensions was at 88% in 2023, and this number has been steadily increasing since 2013.
While it’s a good idea to pay into a pension, changing jobs every few years is becoming the norm, with StandOut CV reporting that the average person will hold nine jobs in their lifetime and work for six different employers. Furthermore, the average millennial worker will have 15 jobs in their lifetime. This could leave you with several pension pots on the go, each holding small amounts and seeing meagre returns.
If you’ve changed jobs recently, or even in the last few years, you may have accidentally left a workplace pension pot behind.
So, even if you aren’t retired or thinking about retirement yet, it could be wise to review your old pots and speak to a financial planner about maximising returns within your pensions.
5. Ensure a lasting legacy by reviewing your will and estate plan
Long-term financial planning means ensuring your wishes are honoured and your loved ones provided for.
So, it may be a good time to review your will and estate plan. You can begin by gathering and reviewing your existing estate planning documents, including your will, trusts, Lasting Powers of Attorney, and any other relevant directives. Ensure these documents still accurately reflect your current wishes, and if they don’t, seek to update them as soon as you can.
Significant life changes are often events that require updates to your estate plan, so if you’ve recently been married, divorced, or introduced new family members, you may need to update your estate plan to reflect your new circumstances.
Remember, a well-maintained estate plan can provide peace of mind and security. You can rest easy knowing that your affairs are in order, and your loved ones protected.
I can help you achieve your financial goals and keep you accountable throughout the year
While the tips in this article could be helpful, talking to a financial planner could make it easier to identify the most useful tasks you could do to help you achieve your personal goals. This is something I could help with.
By looking at your unique circumstances and goals, together we can work out a plan that sets you off on the right foot for the rest of the year (and beyond).
Get in touch
Email Marnel.Stafford@fosterdenovo.com or call 07305 970959 or 0207 469 2800 to find out more about how I can help you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits.
Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirement.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Workplace pensions are regulated by The Pension Regulator.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
The Financial Conduct Authority does not regulate estate planning, cashflow planning, trusts, tax planning, Lasting Powers of Attorney, or will writing.
The Financial Conduct Authority does not regulate estate planning, cashflow planning, trusts, tax planning, National Savings products, deposit accounts, Lasting Powers of Attorney, or will writing.