It’s the beginning of a new year and this often means new year’s resolutions. However, we would advise firstly reflecting on the past year and reviewing your finances to see what worked and what didn’t.
If you have been paying off debt, saving or investing, now is a good time to check what worked and what didn’t. Once you have done this you will be able to make adjustments for 2022.
Reviewing your finances from 2021
How well did you do in 2021? Were you saving for something in particular or where you just trying to stick to a budget? Either way, reviewing your finances and checking how you did and highlighting areas where you could improve in 2022 is very beneficial.
Have you been able to put aside an emergency fund or did you dip into this at Christmas and you need to build it up again. Did you spend on your credit card towards the end of the year and need to pay off credit card debt? Now is a great time to spot anything that needs work and checking your credit report can help you do this. We advise using Checkmyfile for a credit report.
Plan for the future
Use this time to plan for large expenditures during 2022. If you are planning for a home renovation, a wedding or a long-overdue holiday abroad, then a plan can be put in place detailing how you can achieve this. Major purchases need money so now is a good time to plan and see whether you can save the money for this purchase or if you need a loan for it.
The average credit card debt of households in the UK is currently £2,033. If you have debt then make a list of all the balances so you have a clear list of what you owe. If your credit score is ok then you may want to consider switching your credit card debt to a new card with a 0% introductory period to save on fees. Otherwise, consider a monthly repayment plan that you can afford and pay this off each month.
Reviewing you finances at the beginning of the year is a good idea and January is also a perfect time to check on your investments. Could you increase your contributions to your retirement fun this year or have you thought about starting investigating other investment opportunities. We can help discuss investment options available to you and help put a plan together for your financial wellbeing.
*Please note: Your capital is at risk. The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. However, if you decide to sell your investments in a General Investment Account you may be liable for Capital Gains Tax.