Start 2021 with New Year Financial Planning

With 2020 having been so unstable and challenging, making resolutions for 2021 might seem a little over optimistic. But if you have managed to get through the year of the Pandemic unscathed and are already deciding how you can improve in 2021 in other ways, then perhaps New Year financial planning might not be such a bad thing to add into the equation.

Here are a few of suggestions which might mean you can end 2021 in a better financial position than you are starting:

Review your financial situation

Your income and expenditure during 2020 have probably taken a turn in one way or another.

In fact, many clients have already approached us to discuss their change in circumstances.

Subscriptions cancelled, or new monthly memberships started. And if you look through your bank statement, you will probably still find Direct Debits that have been running for years after you stopped receiving whatever it was, they were paying for. That mystery monthly debit card payment for which neither you nor the bank are able to trace the origin, and so you can’t stop. Or Standing Orders that you simply haven’t taken the time to cancel.

They soon start to add up.

Which is why now is a perfect time to get to grips with what is absolutely necessary in your life and set some New Year financial plans to review, reassess and refresh your finances.

Whether you are looking for savings accounts, to set up a pension plan, or an investment portfolio, speaking to an expert makes sense if you are hoping to start the year as you mean to go on.

Our team of financial specialists will help you assess your financial situation and work with you to find the most appropriate products and efficient plans specifically to suit your circumstances.

Reduce your credit card debt

Credit cards can be used to your benefit if you manage your spending and repayments strictly.

But are you one of the many thousands of people who pay for Christmas on the credit card with every intention of paying it off in January? If you are unlikely to be able to settle the outstanding balance, consider switching to lower interest or preferably an interest free account.  

Two ways to pay chunks off your balances are to focus on clearing the card with the highest interest rate first. At the same time though, continue to pay the minimum payment required on any other cards.

Or aim to clear the lowest balance and lower interest ratefirst, so you will feel the sense of satisfaction of having settled one debt completely. Again, make sure you are paying at leastthe minimum on any other credit card accounts at the same time though to prevent further balance increases or unnecessary fees.

But under no circumstances should you consider ignoring your credit card bills. If you struggle with your monthly payment, contact your provider to explain the situation. Do not just put the statement to one side, hoping it will go away. It will only get worse, and impact your Credit Score, causing problems with future borrowing, mortgage, etc.

It is worth taking the time to search for the best options. Keeping the interest element as low as possible means your balance will clear much more quickly, leaving those additional payments free for other vital items or to put towards a savings plan.

Setting a budget

As with all plans, New Year financial planning is all well and good if it is realistic.

Having reviewed your current finances, the next step is to set a budget.

Calculate your essential expenses such as mortgage/rent, household bills and groceries, credit cards/loan repayments, and School/University fees, etc. Then move on to allowances for social events and other non-essentials – being realistic means including some fun elements into your planning as well as the necessities.

If you put away every penny without any enjoyment, chances are you will reach a point of boredom and go on a spending spree as a treat. Which you may later regret! But it still doesn’t mean you can grab take away meals and coffees at every opportunity.

What are you hoping to achieve by setting a budget? Are you saving for something specific – a new home, car, a holiday, University, retirement? Or simply to make your money stretch a little further for quality time with your loved ones now?

A financial planner will help you set realistic budgets and goals, keep you on track, and accountable. Regular review meetings are one of the many benefits of referring to a specialist who will see the bigger picture, which you may not be able to see from inside your current financial bubble.

Alternative financial options

If you are already paying a mortgage, loan of any kind, or credit cards, then you might also want to consider alternative options to ensure you are not missing out on better deals.

Our Independent Financial Advisors and Mortgage Advisors have access to more options than the banks and mortgage lenders and can assist with your financial planning by finding the most appropriate lending options currently on the market. A Mortgage Health Check to find a more appropriate product for you, a remortgage, or a loan.

Savings and Investments

If your New Year financial plans include savings and investments, it can be overwhelming when you start looking for your best option.

Let us help you with this. From the best savings accounts to suit your needs, to investment and estate planning, and affordable income protection and retirement schemes, we guide you through the process from start to finish.

Read our blog Planning for Retirement for more information on what to consider when looking to the future.

Your New Year Financial Planning summary