A New Year’s resolution is a tradition, most common in the Western World but also found in the Eastern World, in which a person resolves to continue good practices, change an undesired trait or behavior, accomplish a personal goal, or otherwise improve their behaviour at the beginning of a calendar year.
This truly is the blog post that could write itself. I don’t think that I even need to write it as it seems to be a human trait that a person’s thoughts turn to self-improvement at the end of the calendar year. December can be a quiet month in financial advisory and more so as the big day approaches but remarkably we have had a sharp increase in enquiries via our websites today, on New Year’s Eve.
One of the things that many people focus on in terms of self-improvement is their finances. Not everyone enjoys dealing with personal finance matters however: someone once said that the best way to eat an elephant is one bite at a time. Here are five things that you can do to improve your finances in 2023;
1. Protect your wealth
During times of high inflation like we are experiencing at present, your savings are devaluing over time. The way to defeat inflation is by investing in real assets. Real assets are assets that tend to grow by more than the rate of inflation like equities (shares) and property. Find out more about this here.
2. Protect your family
Have you ever wondered how long your life insurance would maintain your family’s standard of living if you or your partner were to die prematurely? The answer for most family’s is not that long. Most people in Ireland have inadequate life cover because in the majority of cases a round figure amount of cover is taken out, rather than calculating the actual requirement. Unless you are a smoker, life cover is generally very affordable, so why not have the correct amount? Contrary to popular belief it is possible to calculate the correct amount of cover which you should have to protect you and your family from the death of an earner. Find out more about this here.
3. Save or invest for key expenditures
This can apply to any known expense you will have in the future but the most obvious large expense which many couples face is funding for children’s third level education. People often don’t make sufficient advance provision for their children’s education – this can cause a cash crunch later in life (when you might feel like winding things down) and it increases the cost. Accumulating funds for future needs in advance reduces the cost as if you invest over time then you need to contribute less as part of the cost comes from the return on the investment. Find out more about this here.
4. Take control of legacy pensions and adopt a target led approach to your retirement
Did you know that people who leave their pensions in an old employer scheme are less engaged with their Retirement Planning? If you want to have a good lifestyle in your retirement you need to be actively engaged with your retirement planning. We can provide you with advice and calculations on what level of contributions you need to make to your current pension to achieve your income objectives in retirement taking the value of all your pensions into account. Find out more about this here.
5. Make a will
I have to confess that I didn’t make a will until I was in my forties and when I did I remember thinking that I really should have done it sooner. Making a will has very practical benefits but the other thing it does is it makes you actually think about what is going to happen if you die prematurely and when you have decided what you would like to happen the next obvious question is do you have the resources to facilitate that? If not now is the time to fix that. Making a will is very affordable so you really should do that without delay.
When it comes to your finances we don’t recommend the elephant approach. Our recommendation is that you can eat the whole elephant relatively quickly by getting a Financial Planner to construct a Financial Plan for you. You can find out more about the benefits of Financial Planning here. You only have to eat the elephant once, so bite the bullet. If you don’t want to take this approach the above five actions will leave you in pretty good shape.
Happy New Year from Highfield Financial Planning.
If you would like to implement your New Year’s resolutions give us a call on 01 546 1100 for a no obligation discussion. You can reach us by email to [email protected] or use the Contact Us form on this website.
The material and information contained on this website is for general information purposes only. Neither the writer nor Highfield Financial Planning Ltd makes any warranty as to the completeness, accuracy or reliability of the information or the suitability or availability of products or services, referred to on the website, for any purpose. You should not rely on any information contained on this website as a basis for making any financial, legal, taxation or other decision. The above post does not include all the considerations which are relevant to the topic discussed as to do so would render the post un-readable. When considering any financial issue you should seek the advice of a suitably qualified adviser.
© Highfield Financial Planning 31 December 2022.
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