This past year has proved precisely how unpredictable the economy can be, and how quickly the changes can impact investments and our day-to-day lives This turbulence can be deeply disruptive, not only to our finances but also to our quality of life and mental health, especially when you are in the process of trying to establish financial security or achieve a particular set of personal fiscal goals. Whilst this is to some degree unavoidable, as we can never know exactly what is just around the corner, there are some steps you can take to protect your finances against any economic instability in the coming year, giving you peace of mind and making it that bit easier to fulfill your objectives.
Prioritise your Pension and Retirement Savings
It can be hard to prioritise a life event that might still be years or even decades away for the time being, but retirement planning is absolutely essential to establishing long-term financial security. If you leave this too late in the day, it will make things significantly more difficult and you will most likely have missed out on considerable employer contributions and interest gains. Ensure you have a retirement saving plan established that is realistic and efficient. If you already have one in place, it is definitely worth reviewing this with your adviser before heading into 2023 in order to check everything is on track and to discern whether you need to action anything before the end of the financial year, which will come around very quickly.
Predict Expenditure and Budget as best you can
As previously mentioned, it is impossible to know exactly what to expect in the next 12 months, especially as there is currently considerable uncertainty regarding the predicted rate of inflation and the effect this will have on investments and the cost of living. However, enlisting the help of an experienced adviser to help you plan for any eventualities that are relevant to you is definitely the next best thing and can make you feel considerably more at ease as you enter the new year. Together, you will be able to predict your outgoing costs for the next 12 months and budget your spending and any investment strategies accordingly.
Be aware of your investments
If you are following one of the primary rules of investing, diversification, you will have assets allocated in a range of different industries, companies, and asset classes in order to protect you against variation in performance across the board. It is always a good exercise to check in frequently on the performance of each investment category, so you can be aware of their individual returns as well as their holistic impact on your finances. Not only does this give you a greater understanding of where your money is invested, but it can also be an indicator of where it might be best to invest additional funds if you are in a position to do so; whilst turbulent market conditions can result in unexpected pitfalls, they can also create some lucrative investment opportunities.
Whilst no one wants to think too much about estate and inheritance planning during the festive season, there is no escaping just how crucial this aspect of financial planning is for the financial security of your family and beneficiaries. Starting the new year with an inheritance plan in place will help give you peace of mind, knowing that those who are important to you will have financial reserves should anything happen to you.
Establish Your Financial Goals for 2023
What are your priorities in 2023 and what kind of position do you want to be in this time next year? These are two very important questions to ask yourself over the next couple of weeks, as without clearly-defined, personal objectives, you cannot formulate an effective plan through which to establish a secure financial future. If you are unsure where to start, your adviser can suggest some objectives that are tailored to your individual circumstances and needs, giving you some additional clarity in your financial journey over the next 12 months.
If you would like to arrange a complimentary review of your finances in the new year with one of our experienced advisers, simply contact us through the link below and a member of our team will be in touch very soon.
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This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity.