5 important financial new year’s resolutions you should consider

For many people, the new year can be a great opportunity to make a positive change to your lifestyle. Whether you plan to lose weight, exercise more, or pick up a new hobby, January can be a great time to start doing things differently.

Of course, while changes to your health and fitness can be very useful, you may also want to use this opportunity to pick up some new financial habits. This is a surprisingly popular resolution, as according to data from YouGov, around 2 in 5 Brits resolved to save more money in 2021.

Making small changes to your life can have significant benefits in the long term. If you want to take more control of your money in the new year, here are five financial resolutions to consider making.

1. Pay your future self first

If you want to build greater financial stability, paying yourself first can be a useful way to accumulate wealth. This involves contributing into your pensions and investments on payday and then budgeting the amount that you have remaining.

Over time, this can be a great way to boost your savings and investments as, after a while, it will quickly become the norm.

Making your money go further can sometimes be difficult, especially if you’ve never done it before. If this is the case, you may want to read our previous article on four strategies for more effective budgeting, so you can find the one that’s right for you.

2. Protect your finances against the unexpected

If you’re the main, or only, earner in your household, have you ever wondered about whether your finances would hold up in an emergency? If you were made redundant or were unable to work due to illness, this could have a significant impact on the wellbeing of your loved ones.

A good way to build more financial stability can be to set up an easily accessible emergency fund, containing three to six months’ worth of expenses. This can help you to keep up with your bills if you are made redundant or have to cover a large, unexpected expense, such as car repairs.

To safeguard you against other risks, such as a long-term illness, or even a premature death, you could also consider seeking financial protection. If you want to find the cover that’s right for you, working with a financial planner can help you to weigh up your options.

3. Update your will

One of the biggest lessons that we’ve learned during the pandemic is that the unexpected can happen at any time. That’s why it’s important to have a will in place, in case the worst should ever happen to you.

If you pass away without one, it could cause a great deal of stress and financial hardship for your loved ones. Not only could your assets not pass to the people you wish, but your family could end up disputing the way they were divided, causing arguments at an already difficult time.

A lot has changed in recent months, which is why it’s important to ensure your will is up to date. Alternatively, if you don’t already have one, now may be a good time to speak to a solicitor and put one in place.

4. Track down any lost pensions

Over the course of your lifetime, you’ll probably have worked multiple jobs and had pension funds under several different schemes. As you might imagine, over the years it can be easy to lose track of them.

If you want to enjoy a comfortable lifestyle in retirement, it’s crucial to have enough wealth to support that. That’s why it’s important to make sure all your pensions are working hard for you.

The new year can be a perfect time to track down any lost funds and give you a better idea about how much income you can expect in retirement.

You may also want to consider consolidating your pensions, so you have less pots to worry about. Of course, there are pros and cons to doing this, so you may want to seek professional advice before doing so.

If you think you may have a workplace pension that you’ve lost track of, you may want to get in touch with your old employers, as they may have some records of them. Alternatively, you could contact the pension provider that your previous company worked with.

Finally, you can use the government’s free website to track down any funds that you may have lost over the years.

5. Book your regular review

If you want to be confident that you’re on track to reach your life goals, then it’s important to regularly review your finances with your planner. The beginning of the new year can be a great time to organise this.

Speaking to a professional can be especially useful if you’re approaching a major life milestone, whether that’s buying your first home or preparing for retirement. Being able to make properly informed decisions can give you greater confidence.

Your regular review can help to ensure that you’re using all your allowances effectively to grow your wealth and meet your financial goals.

Get in touch

If you want to take more control of your money in the new year and want to know how you can do that effectively, we can help. Email enquiries@prosserknowles.co.uk or click here to request a callback from one of our advisers.

Please note:

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.