As we come to the end of 2023, it is a chance to reflect on the past 12 months gone by and reassess for the year to come. This is also the time when we tend to set new year resolutions, encouraging ourselves to achieve the targets that matter to us.
Often, these resolutions focus on health and wellbeing. You might perhaps aim to follow a new diet or pursue a new fitness regime.
These are absolutely sensible targets to have. Yet, one area that could be even more important to consider for your resolutions is your finances.
Setting resolutions for your wealth can be hugely effective, ensuring that you will be financially secure and stable for the year ahead and beyond.
Read on to discover five new year resolutions to set now that could help you manage your money in 2024.
1. Double-check that your emergency fund is sufficient
An emergency fund is the bedrock of your financial plan. So, as 2024 begins, it is worth double-checking that you have a sufficient sum in it to provide you with the stability you need.
Imagine that your washing machine breaks down or there are expensive repairs to make on your car after its MOT. Having money set aside in an easy access account to dip into for scenarios like this can be extremely useful.
That way, you do not have to liquidate investments or access your pension to pay for these costs, a decision that might otherwise affect your progress towards your financial goals.
Typically, it is worth having enough in your emergency fund to cover your expenses for between three to six months. In retirement, it may be worth having enough to cover you for 12 months.
You may not face these costs in the new year. Even so, it is still worth making sure you have enough set aside, if not just for the peace of mind you can achieve from knowing there is money available if you need it.
2. Check that you have appropriate financial cover
Speaking of achieving peace of mind with your wealth, another great new year resolution worth thinking about is checking that you have the right protection in place for your needs.
There are certain events that are completely outside of our control. Whether that is injury, illness, redundancy, or even death, these circumstances can seriously affect you, your family, and your financial situation.
Indeed, think about what would happen if you were suddenly unable to work. Would you still be able to meet your financial obligations or achieve your goals in later life?
Or what would happen to your family if you were to pass away? Would they be able to continue living your current lifestyle, or even remain in your home?
This is why having adequate and appropriate financial cover is crucial. You may want to consider having some or all of the following:
- Life insurance
- Critical illness cover
- Income protection
Take the time as a new year begins to ensure that you are satisfied with the protection you have. If you already have cover, check that it is still appropriate for your needs.
Meanwhile, if you have yet to put any in place, it may be worth speaking to an expert and finding out what you need in your personal circumstances.
In doing so, you can be confident that you and your family will have a financial safety net against such serious emergencies in the new year.
3. Reassess your savings habits
The festive period and transition into the new year often tends to be a busy and expensive time, and you may find your regular savings habits slip slightly at the end of the year.
Fortunately, the start of a new year offers the ideal chance to review how much of your income you are managing to set aside in your savings, investments, and pensions.
So, having a new year resolution to save a certain amount of your monthly income can be an effective way to set yourself a healthy habit for the year.
As part of this, it can be useful to review your budget and check whether there are any areas of expenditure you could cut back on. You can then use these economies to put money aside for the future.
This can help put you back into a saving mindset, especially if you find that this fell away as a priority during the festive season.
4. Review your will so that it is up to date
Creating a will is a crucial part of your financial plan. Doing so ensures that your wealth will be divided how you choose on your death, and can help to prevent disputes between your family at what will already be a difficult time for them.
Of course, as your life changes, so might your wishes for how your estate is administered. Events such as buying property, marriage, children being born, or divorce can affect what you want to happen when you pass away.
So, take the opportunity of a new year to reassess your will and check it is up to date. Make sure you consider any events that have occurred in the last 12 months that you may want to factor into your estate plan.
As part of this resolution, try to commit to continuously doing this regularly. A good rule of thumb for when to do this is either after a life-changing event like those listed above, or every two years.
5. Assess your progress towards your financial goals
Effective financial planning is all about organising your wealth to achieve your targets. So, the new year presents an opportunity to check your progress towards them and see whether you are on track to achieve what you want out of life.
Your goals will be entirely personal to you. Whether it is to retire at a certain age, or you have a specific target for the retirement lifestyle you want to live, working out what is important to you can help you create a plan with your money that lets you reach those ambitions.
This is why a key new year resolution is to look at what you can do over the coming 12 months to further your progress on the path towards those objectives.
You might find that you could increase your pension contributions in 2024 to give your fund a further push. Or, there may be methods you can employ to make your wealth even more tax-efficient, so you are the biggest beneficiary of all your hard work.
It can be useful to speak to your financial planner, as they will have the knowledge and experience to offer you specific insights that ultimately allow you to live the lifestyle you want.
Get in touch
If you would like help managing your money in the new year, then please do get in touch with us at DBL Asset Management.
Email enquiries@dbl-am.com or call 01625 529 499 to speak to us today.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
Note that protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing.
