This time of year is traditionally when many of us take stock of our finances and see what is going to make us better, or worse, off.
Some things, like resolving to spend less on alcohol and sweet treats may be under our control (if we have the willpower). Others, like rising costs may be out of our hands.
So, what does 2020 hold for your future? At Continuum, we are looking at some of the financial challenges, and at the ways to deal with them.
Getting to work
If you are a commuter, getting to work will be more expensive in 2020. At the beginning of the month, rail fares rose by an average of 2.7%, although rail companies are claiming that not all fares increased and that some even went down.
An annual ticket offers 52 weeks’ travel for the price of 40, and could be a good investment, especially if you can arrange it so you are not paying for travel while you are away on holiday. Judicious use of monthly Season tickets might help – and see if your employer will offer a season ticket loan.
Buying a home
Some commentators expect house prices across the UK to increase by around 2% in 2020, although there could be big variations depending on where you live. London and the South East could be heading down as a price correction undoes several years of house price growth, while Wales and the North could be on the up.
A lot depends on the Brexit deal and the way that the economy responds after the event. Some commentators have spoken about falls in house prices if the economy contracts.
The fact is that no-one can be certain what exactly will happen, and that the market is currently depressed with fewer buyers and fewer sellers. This could actually be good news. If buyers are thin on the ground you could be in a position to negotiate and there are some very attractive mortgage deals to be had, as lenders need to hit their lending targets.
A call to the mortgage team at Continuum could help you find the mortgage you need. Our experts can search out the best deals from the entire market.
Running an overdraft
Using an overdraft is unavoidable for many people who find that they run short at the end of each month. The Financial Conduct Authority is bringing in new industry rules to make overdraft charges fairer and simpler to understand.
The regulator’s changes are designed to shake up the overdraft market, stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts. If you sometimes slip into an unauthorised overdraft you may pay less under the new rules. But those who stick within their authorised overdraft may potentially find they pay more and find that you are charged around 40% annual interest.
At Continuum, we believe that the best solution may be to avoid the need to use an overdraft, by careful budgeting, and dealing with debt which eats into your available cash. Most of us find that we are saddled with debt on credit cards. The best way to pay this off is to transfer it to a 0% interest card. It can be easier paying off a large debt balance if interest charges don’t mean that it goes up every month.
Dealing with the unexpected
With the aftermath of Brexit still to be felt, some observers are less than confident about the UK economy in 2020. For most people it makes sense to have a financial safety net in place.
Many financial experts recommend a cash reserve equal to about three to six months’ worth of your income. Having a six-month reserve of cash gathering little interest in an instant access bank account is an expensive luxury. One solution is to put enough cash for the first month in an instant access account, and the rest in a higher rate account, with 30 days notice. Your emergency fund could grow into a useful nest egg if you never need to call on it.
At Continuum we can help you find a home for your emergency fund, where it can grow as well as provide security, and complete your financial safety net, with insurance cover tailored for your needs.
Looking forward to 2020
Whatever the financial challenges you face in 2020, the solutions can be a great deal easier to find with help from Continuum. Setting up an initial meeting and a financial review could get an expert eye on all your current arrangements, and help you start looking forward to a prosperous new year.
Why not give us a call today?
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.
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