Financial Planning and the 12 Days of Christmas
When the turkey is all eaten and the presents all opened – it is time to relax, chill out a bit and maybe think about what this year has meant for you. Maybe it’s time to start thinking about where you want to be by next Christmas. And that involves a bit of financial planning.
So here are our top tips for the 12 days of Christmas –
I know it’s not the most interesting thing you could do right now – I’m sure you would rather be watching the Queens speech – however knowing what you spend and what you spend it on, and then deciding a budget for the future, is the first step to having a very merry Christmas next year. Many people overspend at this time of year, because they don’t have an exact grip of their financial incomings and outgoings. That leads to only one place – financial hangover – and you really don’t want that after Christmas! So start creating a budget now.
Building on the idea above of creating a budget – you should know what you are allowing yourself for incidental spending. In which case – pre load an i-tunes card or a Starbucks card every month and enjoy. This way you won’t exceed your budget – when you run out that’s it till next month!
People with written goals tend to achieve them. If you have done step 1, this step should be easier as you will know what your disposable income is. Once you have decided what you would like to save – talk to your IFA about where and how to save it.
This applies to whatever you do in life, not just your financial decisions – but always know the risks or you can end up with unpleasant suprises.
Especially with savings plans. Very few people make millions overnight – mostly people who end up where they want to be have taken small steps over a long period of time and have been patient.
Always always take advice. Unless you are an IFA there will be things you don’t know that can impact your financial plans. So always take your time to find the right advisor for you
Remember Mr Micawber's famous, and oft-quoted, recipe for happiness:
"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
Most people assume that their credit record will be an accurate reflection of their credit position. That is a dangerous assumption to make as one of my clients found out when she was turned down for a business bank account because of an (incorrect) £20 missed payment to a book club. Check it !
In other words – understand what you own and why, so you can make informed decisions going forward. You would be amazed how many people have forgotten about company pension pots, and according to some websites - up to £15 billion of unclaimed financial assets in the UK lie in old bank accounts, pensions, life assurance and investments. So know what you own!
Stuff always happens doesn’t it? The oven blows up 3 weeks before Christmas / your child comes home from school and they need a deposit to secure their place on the next school trip / you get a flat tire. It’s a great idea to have an emergency fund for those unforeseen expenses. If you don’t use it – great, but if you need it then it saves the agonising or the borrowing!
You are your most important asset in your business and your family life. So make sure you budget for your own self development and relaxation.
This is the ideal time to set up a plan for 2016, using all current allowances etc and incorporating your own priorities for short, medium and long term. For a free, no obligation consultation email us here.