However carefully you plan, it’s easy to be distracted by factors outside your control. And, in the last couple of years, we’ve had more than our fair share of events which may have left you thinking twice about aspects of your financial plan.
On any given day, it’s easy to start worrying about the trade war between China and the US or what Donald Trump might tweet next. It can be distracting to consider what might happen if we don’t negotiate a trade deal with the EU before the end of the Brexit transition period, or the worrying performance of some of the UK’s major retailers.
The truth, however, is this: you cannot control any of these events. You have no control over geopolitics, the Brexit process, the short-term direction of stock markets, the weather, Tesco’s profits, inflation, tax regulations, interest rates or who wins Britain’s Got Talent.
However, when it comes to creating and executing a financial plan, the key is to focus on the events you do have some control over. In terms of your plan, ignore the news (the Negative Events World Service!) and focus on the things you can affect:
- Planning – you can make a plan based on what is important to you and focus on that
- Saving and investing – you can decide how much you put away for the future
- Reducing expenses – you choose where to make savings and efficiencies
- Protecting yourself – you can ensure you achieve your financial goals if the worst happens
- Your own peace of mind – by doing the ‘boring stuff’ such as making a will, putting life insurance in trust and so on.
In the spirit of the New Year, I thought I’d share ten really easy resolutions that will help you retain control of your financial plan in 2020. Hope you find some of these useful!
10 easy financial resolutions you can make this January
1. Start repaying your debt
While debt in itself is not necessarily a bad thing – most of us needed a mortgage to buy our home! – it can be a burden that stops you achieving your goals.
If you have credit cards charging 20% and cash in a savings account paying 0.5% it’s easy to see how you might benefit by repaying the debt.
2. Do your tax return in plenty of time
According to HMRC figures, more than 700,000 tax returns were submitted online on the ‘deadline day’ in January 2019.
Getting your return in on time means you’ll avoid becoming one of the estimated 700,000 people who faced a penalty for late submission. However, leaving things to the very last minute can be highly stressful. For example, if you suddenly can’t find a key document or piece of information you’re risking either some unwanted last-minute hassle or, at worst, a £100 penalty.
3. Sort your Lasting Power of Attorney
You don’t just need to have a Lasting Power of Attorney (LPA) if you’re old or unwell. You never know when you might suddenly lose capacity, so it’s wise to put an LPA in place.
Ensuring you have an LPA means your affairs will be dealt with by someone you trust and who has your best interests at heart.
4. Check your Premium Bonds
According to NS&I figures, there are more than 1.7 million prizes worth almost £64 million still waiting to be claimed by Premium Bonds holders.
If you hold Premium Bonds, find them, register online, and find out if you have an unclaimed prize. Remember that there is no time limit for claims.
5. Make your ISA contribution early
As we approach the end of the tax year, there will be a scramble as investors are encouraged to maximise their ISA allowance before losing it on April 5th.
Instead, why not make your ISA contributions at the start of the tax year? You’ll avoid the stress of topping it up as the deadline approaches, and you’ll benefit from a whole year of tax-free growth.
6. Pay your ‘future self’ first
Waiting until the end of the month and investing whatever money you have left rarely works. Your expenditure will often expand to meet your income and you might not have much left to put aside.
Instead, start investing for your future at the beginning of every month. Treat it as a direct debit and part of your ordinary monthly expenditure.
7. Introduce a financial date night
In many households, one partner takes responsibility for many of the financial decisions. So, to ensure that you both know where you stand, introduce a financial ‘date night’.
Show your partner your savings, pensions, investments, credit card bills and utilities. This way you can ensure you both know what your situation is.
8. Change your bank
When was the last time you genuinely considered changing your bank? People are notoriously reluctant to switch their current account: for example, just 6,000 of more than 5 million TSB customers switched even after the bank’s well-publicised IT meltdown in 2018.
There are lots of incentives available to switchers, and you may also benefit from lower fees and charges, and a better service.
9. Tidy up your pensions
If your career has taken you via several different employers, or you’ve ever had a period running your own business, you could easily have built up several different pensions.
I have previously written about why it’s beneficial to tidy up your pensions, so make 2020 the year you get out all that old paperwork and speak to a financial planner about whether it is a good idea to consolidate your retirement savings.
10. Regularly review your finances
As we have seen, a financial plan can easily be blown off course by external events. This is why it’s so important to regularly review your plan with your financial adviser.
Your planner can help you to stay the course, and to give you the confidence to make decisions without being influenced by events out of your control.
If you want to have a chat about your financial plan or you’d like advice in meeting your goals, please give me a call on 07769 156 250.
The value of your investment can go down as well as up and you may not get back the full amount invested
The Financial Conduct Authority does not regulate Will Writing, National Savings, Power of Attorneys, taxation and trust advice.