2019 is with us, and the credit card bills will be with us soon enough too. They come as a reminder that simply wishing for a prosperous new year is not enough.
To enjoy a prosperous 2019, you need to plan how you will achieve it. There is no better time to start than right now.
We look at making a financial plan for 2019.
What are you aiming for?
The first step towards successful financial planning is to set your goals and decide exactly what it is you are planning for.
Is your priority paying off the mortgage, planning for the holiday of a lifetime? Is it setting up your own business? Is it making the most of retirement?
We all have our own financial priorities, but it is not until you have worked out what they really are that you can really make progress towards them.
If you don’t feel you are on track, there are some things you need to look at without delay.
Look at your outgoings. Are you spending too much on credit cards, for example – they are an expensive way to borrow. Deal with any outstanding debt as soon as you can.
Aim to see where the money goes, from groceries to annual costs such as insurance premiums, car payments and the mortgage. How much goes on necessities and how much is spent on luxury items?
Look at your income. You know what is coming now, but you may get a pay rise, switch jobs or even find that you are taking a pay cut. Do you have the income you need, or do you find that you are running short each month?
You may need to cut back, or to create an additional revenue stream. Turning a hobby into a part time business could be enjoyable as well as rewarding.
Compare your income with your outgoings. A balance sheet will show what you’re left with after your spending is deducted from your income. It will let you see if you need to cut back on your spending, re-evaluate your financial objectives – or increase your income.
Look at your assets. If you have money gathering dust but little interest in a low rate savings account, you need to see how you can make it work harder for you.
Investing could make your money work harder and build a nest egg. Savings – where your money is kept as cash are still not doing as well as they might, and turning them into investments, where you buy something such as stocks or shares in an investment trust can make them work harder. Stocks, bonds, funds and property are all viable investment options that you could consider.
Look at your existing plans and arrangements. Check that your pension is working hard enough for you, whether your investments are still performing as they should.
Equity investments do not afford the same capital security as deposit accounts.
Your financial plan
Armed with this information, it should be much easier to see what you need to do to meet your goals
It is only when you have a clear picture of where your finances are now that you can start working on a financial plan that will get them where you want them to be.
You might need to invest more, for example. Or it may be that you need to contribute more into your pension, even if it means cutting back on things now.
If you need to up your income, boost your pension or make other changes to your finances, a personal review from one of our experts could help you discover new ways to make the most of your money now and in the future. For the answers you need to make it a prosperous new year, contact the Continuum team.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.
The value of investments can fall as well as rise and you may get back less than you invested.
Your home may be repossessed if you do not keep up repayments on your mortgage.