Financial wellbeing can positively impact both your wealth and your mental health. Knowing that your financial situation is secure brings peace of mind, helping you focus on all other aspects of life. Here are five simple steps you can take now to start the year with financial confidence.
1. Revisit Your Budget
A solid understanding of your income and expenses is essential for planning your financial year. Now is the perfect time to review your monthly budget and ensure it is still in line with your goals. Look at areas where you could potentially cut back—be it on subscriptions, discretionary spending, or other outgoings—and consider how much you can comfortably put aside for savings. Importantly, ensure that your budget still allows room for life’s little luxuries, like holidays or dining out.
2. Review Your Financial Plan
Having a financial plan is crucial to achieving long-term financial security. Whether your goal is to build wealth, save for a dream holiday home, or plan for retirement, it is essential to review your plan regularly. The start of the year is an ideal time to ensure your goals are still on track. Your circumstances may have changed, and now might be the right time to revisit your investment portfolio, adjust your asset allocation, or re-evaluate retirement goals based on your current situation. Working with a qualified financial adviser can ensure that your plan remains aligned with your goals, and they can guide you through difficult decisions such as how to protect your wealth for future generations.
3. Protect Your Family’s Future
It is easy to put off thinking about worst-case scenarios, but one of the most important aspects of financial planning is ensuring that you and your loved ones are protected should the unexpected happen. Do you have an up-to-date Will and a Power of Attorney in place? These documents are critical to ensuring that someone you trust can manage your financial affairs if you are unable to. Furthermore, review your financial protection policies, including life insurance, critical illness cover, and income protection. If you run a business, consider executive income protection or relevant life insurance. Planning ahead means your family will not be left struggling financially if the worst should happen.
4. Keep Saving and Invest Wisely
Building a strong savings foundation is key to financial success. Before considering additional investments, make sure you have enough cash set aside for emergencies and short-term needs (typically, three to six months’ worth of living expenses). If you have surplus funds, consider investing them in tax-efficient and inflation savvy ways. The end of the tax year (April) is fast approaching, which means now is the perfect time to take advantage of ISA and pension allowances.
5. Speak with an Independent Financial Planner
Working with a financial planner is more important than ever. They can help you navigate the best options for maximising your savings, reducing your tax burden, and growing your wealth in line with your risk tolerance.
Starting 2025 with a solid financial foundation will not only help secure your future but will also reduce stress and give you the confidence to achieve your goals. Make this the year you make the most of your finances. If you would like advice or assistance in putting these steps into action, feel free to get in touch with us at TaxAssist Financial Planning. Our team is here to guide you through every financial decision you need to make for a prosperous future.