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.
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.
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.
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:
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.
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:
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.
We regularly publish investment updates, as well as host quarterly webinars to explain what’s happening in financial markets or how you can manage your wealth. Just submit your email address to receive the updates in your inbox.
Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.
If you would like to find out more about how we can help you with wealth planning support, please contact us on the same number as above, or complete the contact us form using the link below.
Any examples of investments and structures used are for illustrative purposes only. The inclusion does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Nedbank Private Wealth does not provide individual tax advice, and instead works with clients’ existing advisers or can provide an introduction if needed. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.
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