Many people in the UK this January are starting the new year with higher mortgage payments, bills, transport and food shopping so a revisit to your monthly budget could be a good thing to do this month.
With higher household expenditure and the prospect of higher taxes in 2023, financial planning has never been a more valuable activity.
Here are some ideas to help you get your finances in shape:
Think rich to become rich
Well rich might not be possible however thinking or manifesting money might be possible. Psychologically, using this technique to focus on a financial goal you want to achieve this year could help you make it happen. There is evidence to show that ‘we attract what we think about most of the time’. Getting a promotion, pay rise or increasing the turnover of your business or saving for a house deposit could all be possible if you focus on that end goal.
Take everything into account
Goal setting is so much easier if you are looking at the bigger picture. We’ve heard of some great online tools such as Money Dashboard Neon or Emma, which connects all your data from different providers to see all your bank accounts and credit card balances in one place. If you prefer to use a spreadsheet, mapping a yearly money plan for 2023 is definitely worth doing. Look at your monthly cash flow for the year ahead and manage any large expenditures that are likely to happen and prepare for any budget shocks such as a fixed mortgage rate expiring.
Income tax changes will also be coming into play in April, as thresholds for the top rates of tax are lowered. Ask yourself the question, could you pay more into your pension to reduce the impact of this?
Investors and limited company owners need to plan for changes to dividend tax and capital gains in the next tax year.
Get in a budgeting routine
Some recommend a weekly budget as well as a monthly budget, allowing you to guide spending decisions for the week ahead and spot any problems that might happen. Try to sync your direct debits to come out on or around the same day every month, this will help with budgeting. Also maybe put money that you can spend day-to-day into a separate account with its own payment card.
Get rid of debt
The aim here should be to try to get your debts down each month. If you can do this then you have enough money coming in for what you are spending.
Contact a Financial Advisor for a pension health-check
With the cost-of-living crisis making some people question cutting their pension contributions, everyone should be aware if they are saving adequate amounts for retirement. We can help you track down old company pensions and get the money working harder for you.
Over 45? It could pay to check your state pension forecast not the government website, particularly if you have worked overseas for part of your career. Individuals need 35 years’ worth of national insurance credits to get the full amount of state pension. If you have gaps then it is possible to pay to top these up but after April 2023, the rules change and you can only go back six years.
If you would like to speak to us for advice on any of the above, then please get in touch and we can arrange a meeting with one of our financial advisers.