This is the time of the year when everyone starts to make New Year’s resolutions many of which will fall by the wayside almost immediately after we hear the chimes from Big Ben!
Stop smoking, take more exercise or perhaps spend less rime working and more time with the family for example.
Far be it for us to suggest the financial New Year’s resolutions that you should make but hopefully some of the following might be worthy of consideration.
If you chose any or all of them our advice would be to get them done as soon as possible; most will take just a few minutes to get started and each of them form one of the building blocks for sound financial planning.
Make a will. Or if you already have one make sure it is up to date and meets your requirements. Our advice will always be to use the services of a Solicitor to draw up your will rather than trying to do it yourself.
It might also make sense to include with your will a Lasting Power of Attorney so that if you lose the ability to make important decisions for yourself the right person will be able to do so for you.
If you are an employee and you are fortunate enough to have an employer who provides a benefits package then do check it out. We often find that employees are blissfully unaware of the valuable benefits that they have paid for by their employer.
Sometimes they are even paying twice for benefits. For example you might be paying for income replacement insurance only to discover that so is your employer and that your income will continue to be paid to you if you are off work sick or disabled.
Ensure that you have sufficient life assurance cover to protect your family (pay off the mortgage and the debts and provide a regular income). See the point above because your employer may already be providing some for you.
Ensure that your pension funds are being invested in a way that reflects your attitude and appetite for risk and volatility. There is little point in taking more investment risk than you need to.
Equally you may be taking less risk than is needed to achieve the level of investment return required to provide you with the pension income you actually want. put simply have you got the right mix of investment assets to get the most suitable returns.
Make a debt repayment schedule. Work out exactly how much debt you have and have a plan to repay it. Even with the current historically low interest rates debt is still a drag. Debt prevents you doing the things you want to do in the future.
If you have an “interest only” mortgage, make sure you know exactly how that is ultimately going to be repaid. It may no longer be appropriate to depend upon rising property values in the future to cancel out your mortgage debt.
Tidy up your financial paperwork. Make sure you know where all the important documents are and store them safely. Make sure also that the executors of your estate know where they can find all the details.
Know your number. Money is of course important because we all need it to pay for the things that we want in life. So what is your number?
How much do you need to do all those things that you want to do? How much will you need to retire when you want to retire?
Plenty of questions so maybe your New Year’s resolution should be to establish exactly how much money you need to acquire.
Photo credit: Flickr/meddygarnet
