Why now is the time to reset your finances
Financial procrastination is common – but costly. Pushing tasks to the bottom of the to‑do list can mean missed opportunities, forgotten goals, or money left idle in the wrong place.
The truth is that the hardest part is simply getting started. But blocking out just an hour or two to review your goals, check your progress and make decisions can give you clarity, reduce stress and help you feel more in control.
Top tip: Schedule a date in your calendar – either with your partner or as a meeting with yourself. Once it’s written down, you’re far more likely to stick to it.
Your personal financial review – what to consider
When reviewing your finances, think about the year that’s just passed, the year ahead, and where you want to be in the longer term.
Here are key questions to work through:
1. What are my long‑term goals?
- Are you saving for your children’s education, a house deposit or the long-cherished dream of a holiday home?
- How much will you need – and by when?
2. When do I want to retire?
- What income will you need to maintain a comfortable lifestyle?
- Consider inflation: the cost of living today won’t be the cost of living tomorrow.
3. Am I on track with my pension?
- Review your existing pension pots. Are they performing as expected?
- Could increasing your contributions help you reach your retirement goals sooner?
Remember, workplace pension contributions are usually taken before tax, which may reduce your income tax bill. High earners may face contribution caps, so consider other forms of tax‑efficient saving where appropriate.
Investing wisely – making your money work harder
After outlining your goals, the next step is turning your plan into action.
How much should you keep in cash?
It’s important to maintain a cash buffer for emergencies – typically at least six months’ worth of essential expenses. This protects you against unexpected costs such as job loss or urgent home repairs.
But holding too much in cash can limit your long‑term growth potential. While savings rates may look appealing, inflation and taxation can erode the real value of your money over time.
A diversified investment approach, aligned to your risk level and time horizon, can help your wealth grow over the long term. Just remember, investing comes with risk, the value of your investments can go down as well as up, and you may not get back what you invested.
If you’re unsure how to strike the right balance between cash and investments, speaking to a qualified financial planner can help you make informed decisions based on your personal circumstances.
Tax efficiency – making every pound count
Tax efficiency is a core part of effective financial planning because every pound you save in tax is a pound that can continue compounding toward your future goals.
By making the most of available allowances, reliefs and tax‑efficient wrappers such as individual savings accounts (ISAs), pensions, and other structured products, you can reduce unnecessary tax drag and keep more of your wealth working for you.
Thoughtful tax planning also helps ensure you’re using all of your available allowances, that your strategy aligns with your long‑term objectives, and you’re protecting and growing your assets in a way that reflects your personal circumstances. Certain allowances, such as ISA allowances, can’t be rolled over into a new tax year if you don’t use them. So, you effectively lose out on tax savings if you don’t make the most of them.
This can be a complex area to navigate, and a financial planner can help ensure you’re getting the most out of all of the allowances and reliefs available to you.
Protecting yourself from life’s surprises
Financial planning isn’t only about growing your money – it’s about protecting it too. Consider reviewing:
Your insurance policies
- Do you have private medical, life insurance or income protection policies (which in many cases are provided as employee benefits), and do they still reflect your current situation?
- Have your needs or family circumstances changed?
Your estate planning
- Have you written a will or updated it recently?
- Do your executors still understand your wishes?
- Who is your nominated beneficiary on any pension policies, and does this still reflect your wishes?
Lasting power of attorney
Setting up a lasting power of attorney ensures someone you trust can make financial decisions on your behalf if an illness or accident leaves you unable to do so.
Next steps: Build a financial plan that works for you
Taking control of your finances can feel overwhelming, but starting now will make a real difference to your future. Regular reviews, realistic goals and actionable steps are key to improving your financial wellbeing.
Working with a financial planner can give you the clarity and confidence you need, helping you understand where you stand today and create a plan to make the most of your money – now and in the years ahead.
If you’d like to review your goals or explore your options, please speak to your Rathbones contact or get in touch with us by filling out the form below.
