Happy NewYearsFinancialResolutions… (what the papers said at New Year)
So you’re back on the chocolate (just to finish that stash from Christmas, and that’s it, honest), the snow is impeding your new running regime, and it’s time to take the decorations down.
If you’re also still sitting on a pile of newspapers from the last week or so, let me help you out. They’re full of:
- Expert forecasts for the year – for example, from the FT:
- Property prices. Forecasts range from up 5% to down 10%
- FTSE100 performance. Year-end forecasts range from 6,748 (which would be about 27% up on recent high of 5,500) down to 3,980 (27% down). There, that’s reassured you that people know what’s going on, hasn’t it?
- Checklists of how to get your finances in order:
- The Telegraph’s: 10 ways to improve your finances
- Martin Lewis’ (also in the Telegraph): Five step money makeover
- The Guardian’s: Ten financial resolutions (this page will change when the next Saturday edition comes out, but you can search from here for articles on financial resolutions)
- The Times’: Ten easy steps to a prosperous new year
- Daily Mail’s: Ten easy ways to save money in 2010
None of them, of course, are saying much new, nor anything that isn’t common sense:
- Budget: understand how much you earn, spend, save. Look over a decent period of time (at least 3 months) to take into account ad hoc costs (like car servicing, or presents) and cumulative Starbucks coffees.
- Cut costs: ensure you’ve shopped around for the best insurance deals. Insulate your home to reducing heating bills. Pay off debts as a priority, or ensure they’re on the lowest possible rate (move credit cards around if necessary). Keep an eye on your mortgage rate.
- Earn more: check your tax code is right. Make sure you’re getting all the benefits you’re entitled to. Move your savings accounts to get the best rates: none of them are great but 3% is a lot better than 0.1%. Keep your annual ISA allowance topped up – cumulatively it’ll make a difference even if it’s not earning much this year. Pay off debts as a priority though (I know we’ve said that already): it’s better to use your money to pay off a loan at 6% then sit there earning 3%.
- Think long term: how much have you got saved in your pension pot? Look at consolidating pensions from previous employers into your current scheme. Check the investments match your own attitude to risk. Keep those ISA savings going as well: they should be regarded as a complementary saving option for retirement.
- Put the newspapers out for recycling. There, don’t you feel better already?!
Seriously though, what becomes so clear is that for those who have some money to spare, there really is no investment that’s a dead cert. So please, please SPREAD YOUR RISK. I was delighted to see a front page article about the growth of multi-asset funds. The principle being that you keep your fingers in lots of pies – and you can do this relatively cheaply, with regular rebalancing to ensure that you don’t end up, erm, all in one big pie, so to speak. We can help you do this, so do please get in touch.
