At the start of a new year, it’s common to reflect on what you want to achieve over the next 12 months, and to set out some goals.
While many start of year objectives focus on health and fitness, it’s also the ideal time to check your finances.
Discover four straightforward new year resolutions that are easy to tick off and can help make a real difference to your future financial security.
1. Start planning for any key financial events in the coming year
The first resolution involves thinking about your year ahead.
If you haven’t already done so, it’s good to get a clear idea of what’s on your personal financial horizon and start planning ahead – and to seek help with your planning if you need it.
Consider any big events with a potentially large financial impact you may have lined up in 2023. These could include:
- A change of employment, or new role in your current organisation
- Moving house, or even returning to the UK
- Impending education costs for your children or grandchildren.
- Mortgage fixed rates coming to end
Planning early will give you a better chance of a successful outcome. You’ll also be able to assess the financial impact of your plans and start ensuring you’re in a robust position to achieve a positive outcome.
2. Review your financial goals
Given you’re at the start of a new year, the 12-month horizon you read about above is understandable, but it’s also a good time to consider your longer-term future.
Decisions made now can have a big impact on your financial wellbeing for many years to come.
It’s much easier for you to stay on track to achieve your financial goals if you regularly review your ultimate objectives and the steps you need to take to fulfil them. This is particularly the case during times of dramatic change and financial upheaval.
One of the best ways of looking ahead and making sure you’re on track is by using a cashflow forecasting tool. Read more about the benefits of cashflow planning and how it works.
This can help you project ahead based on your current circumstances, ensure you’re still on track, and act as a valuable prompt to make changes if you need to.
It’s important to review your goals regularly to reflect changes in your current financial affairs and any external factors that may have affected your situation.
3. 2 simple estate planning steps
If you’ve been putting off getting your affairs in order, resolve to take control of your estate planning in 2023.
While it can be difficult to think about, organising your affairs can give you peace of mind and ensure your wishes are followed.
Write or review your will
A will is the most effective way to ensure your estate is passed on according to your wishes, so it’s an important document.
Completing one is very straightforward, so if you haven’t already done so now is really the time to get it done – especially given the problems your family would face if you were to die without a will in place.
Writing a will means you can specify exactly who you want your beneficiaries to be, and what assets you want them to inherit.
If you already have a will in place, it’s a good idea to review it regularly to confirm you’re still happy with the details.
You should also check it after key life events such as marriage, the birth of children and grandchildren, and divorce.
Most pertinently, you also need to consider having a separate will for each jurisdiction in which you hold substantial financial assets, although for some assets such as pensions or insurance based investments this may not be necessary.
A previous article we shared can give you some help with this. Read about why you need wills on all your overseas assets – and the steps you need to take.
Name a Lasting Power of Attorney
As well as a will, the other important financial document you need to have set up is a Lasting Power of Attorney (LPA).
An LPA gives someone you trust the ability to make decisions on your behalf if you’re unable to – for a short period or in the longer term.
There are two types of LPA, one covering financial affairs and one covering your health and care, and it’s advantageous to have both of these set up.
If you don’t already have an LPA in place, we would strongly recommend you consider this a top priority.
4. Make sure you and your family are protected against unforeseen events
Unexpected events can play havoc with your financial security and wellbeing.
Your financial journey can easily be blown off course and, as we have seen during the Covid pandemic, it’s important not to take your health for granted and to consider the financial impact of you not being able to provide for your loved ones.
Because of this, it’s worth taking some time to review your arrangements should the worst happen. The start of the new year is as good a time as any to do this.
For example, you need to ensure you have sufficient life cover in place. At the very least, you should cover the amount of any outstanding debt you have – in particular, your mortgage.
Beyond that, ensure that a sufficient amount will be paid to your loved ones in the event of your death to enable them to live comfortably without you to provide for them.
Get in touch
If you have any queries regarding any of the four issues you’ve read about here, please get in touch.
You can contact us by email or, if you prefer to speak to us, you can reach us in the UK on +44 (0) 208 0044900 or in Hong Kong on +852 39039004.
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