2022 was meant to be a return to normality, and although in some cases this is true, in many other areas such as the war in the Ukraine, cost of living rises, market turbulence and strikes, it has been anything but normal.

This has led many people to stop and take stock of their priorities and what really matters to them – turning their attention to forward planning and some New Year resolutions beyond changing diets or committing to a ‘couch to 5k’.

We believe a good place to start is by reviewing your financial situation. Here are five simple steps to get your finances in order for the new year and beyond.

1. Make a list of your regular outgoings

A sensible place to start when it comes to assessing your financial situation is your incomings and outgoings. Consider making a list of your regular payments to see what you’re actually spending your money on. Do you have long-standing costs and commitments you had forgotten? Are you still paying out for things you no longer use (or need), such as gym memberships or media subscriptions? By recording what you regularly spend you will have a much clearer picture of your own cost of living.

You could even take this a step further and work out your own personal inflation rate. The Office for National Statistics publishes the official UK inflation rate each month based on the Consumer Price Index (CPI). By taking your own monthly costs and comparing them to those of the previous year, you can estimate your own personal inflation rate. Repeating this exercise once or twice a year can help you track your changing spending patterns, and plan more clearly for the future.

2. Don’t neglect your will – and other paperwork

There’s a famous quote that nothing in life is certain except for death and taxes. Yet a large portion of UK adults don’t have a will. Wills are vital tools for planning for the future of your loved ones, so if you haven’t already made one, you might want to make it a priority in 2023. If you have, you should consider reviewing it regularly, especially if your circumstances change. And remember that if you have assets overseas, you may need additional specialist advice to determine whether a will is required in each jurisdiction.

Official documents, such as wills, share certificates, and birth and marriage certificates, should also be kept together in a secure place – where you and the rest of the family can easily find them when needed.

Remember: the rules for how long you should keep paperwork depend on the type of document.

3. Plan the short, medium and long-term

Begin to plot out your goals. What, for example, do you want to achieve in the next two, ten and 25 years? Consider undertaking a gap analysis – which identifies where you are now, where you want to be, and the steps you need to take to get there.

Things to consider:

  • Do you have an idea of what you want to pass on to your children, or even your grandchildren?
  • If you’re a business owner, do you have a succession plan in place?
  • When do you want to retire and is this achievable? If not, what more can you do to work towards this goal?
  • Will your family be adequately provided for when you’re gone? And what more can you do in this area in terms of insurance and protection?
  • Is your money working as hard as it could be? If managing your finances is not your strong suit, consider sitting down with an adviser who can assess if there’s more you could be doing.
  • Do you have a desire for philanthropy? Could you afford to give more financially and, if so, where should these funds be going? Take some time to ask yourself what causes matter most to you and what you’re passionate about. These answers could lead you towards certain organisations or, again, a wealth adviser can help, particularly with the structure of your donations.

4. Tax matters

With your paperwork and records properly organised, you can start investigating whether you are taking full advantage of any possible tax allowances and reliefs you could be entitled to. If you are UK resident, are you using your full annual ISA allowance? Is your pension working as effectively as it could be? And did you know that some pensions can also be passed on to the next generation outside of your ‘estate’?

As ever, tax matters are notoriously complex, and it always pays to take specialist tax advice to suit your own individual circumstances.

5. The bigger picture

To gain better insight into the things that go beyond pounds and pence but may still impact your finances, consider asking yourself these questions or talking them through with a loved one:

  • Are you living where you want to be? Are you planning on moving as part of your short, medium or long-term goals?
  • Are you looking after yourself sufficiently in terms of your health – both mentally and physically?
  • When/where are you happiest? When/where do you feel most fulfilled? How can you incorporate more of these moments in your everyday life?
  • Do you feel part of a network – professionally or personally? Would you rather be closer to loved ones?
  • Do you want to invest in the things that match your values?

Once you have taken the time to truly understand these aspects of your life and how you feel about them, you’ll be in a strong position to look at your life and see where adjustments – small and large – can be made in terms of time and money spent.

If you would like to discuss any aspect of your financial plans, please get in touch – our experienced wealth planners would be very happy to assist you in developing a personal wealth plan to help you and your family achieve your financial goals.