Financial Resolutions Are Made For Keeping

It’s that time of the year again. Later on this week you will likely be sitting at a Christmas table overflowing with Turkey and trimmings and opening that bottle you’ve kept tucked away while reacquainting yourself with your living room. On the other hand, you may be the more physically active type and decide on a travail of the ’12 pubs of Christmas’ or take a stroll past the windows of Brown Thomas. You may even be planning on a Christmas day dip in the Forty Foot! Whatever your seasonal activity, we hope that you enjoy it with gratitude and goodwill onto all.

This is also perhaps, to a lesser extent, known for being a season of self-reflection and forward planning. While joining the Gym and drinking less alcohol are always top of the New Year’s resolution list, they often drift by the wayside. Financial resolutions are made for keeping however, and rarely will you meet someone who laments putting those in place and sticking with them. The following measures will help you do just that.

NEW YEARS FINANCIAL RESOLUTIONS 2022

1. Understand yourself firstly

A step often overlooked in beginning a resolution of any kind is understanding the resolution maker. Setting a lofty savings goal for example will come under serious strain if you are by your nature a spender. In the same manner as laying out plans to sit down for two hours a week to review your finances will likely fail if you are quite social or enjoy becoming engrossed in following the latest expensive trend. Therefore, it is best to make your goals SMART, that is, Specific, Measurable, Achievable, Realistic, and within a certain Time frame that suits you and your personality type.

2. Review your current Financial Landscape

What are your fixed and variable expenses? Those that are unavoidable and periodic like mortgage and Utility payments, and those that are superfluous, that mid-morning coffee or subscription service you enjoy. Starting with your largest expenses and working down, review the marketplace and see if the same product or service is provided at a lower cost or interest rate. There has also never been a better time to consolidate loans as enhanced competition in the Irish market has allowed for personal loan interest rates to drop as low as 5.9% APR depending on the sum in question and the repayment period. If you do not have a budget or your budget is overly flexible, review your receipts weekly and trim expenses where possible. This will allow you to build up savings which could well be needed unexpectedly as Life can be anything but predictable.

3. Prioritise Financial Products in their Proper order 

Once you have established a budget that suits your lifestyle and are in a pattern of saving on a regular basis the following financial products are a must to provide for you today and into the future.

The first financial product anyone with a family, especially a young family, should purchase is Life Assurance. This is a bedrock of Financial Life planning and monthly premiums can be as low as €20 a month to cover €500,000 sum insured. This insurance provides for your loved ones in the event of your passing and we recommend it before any other financial product is considered.

Having covered the long term downside you need to consider issues that may arise in the short term. Have you got an emergency fund? If not, we recommend building a fund that might cover up to a year’s normal family expenses including mortgage payments as well as the more mundane utility bills and general housekeeping.

Once these are in place the next port of call is to establish a Pension if you do not have one already in place. If you do, ensure that where practically possible you are maximising the tax relief you can obtain based on your age range and contribution cap.

The next part in your financial journey is to consider an investment product in order that you may receive a return higher than that of a deposit account which would not be difficult considering how low the interest levels are on deposit accounts these days. A Certified Financial Planner will be best equipped to advise you on each of the above product types and how to structure these in the most efficient way based on your personal financial circumstances and commitments.

4. Revisit your progress and make adjustments where necessary

Annually reviewing your progress ensures that you remain aligned with your objectives as much as it is an exercise in seeing the power of change and the positive financial impact that this has brought in the prior twelve months.

Naturally circumstances change in life and so should you. It may be that you would like to contribute more to a pension over time or that you are getting married or divorced or restructuring your finances to accommodate having Children or caring for parents. As the driver of change, consider each point in context and make those tweaks as appropriate to facilitate change.

A plan is only beneficial if it is being followed and a followed plan is more effective when we are accountable for our actions. It is important to have oversight, especially if the overseer is an expert in their field as in the case of a Financial Planner who is qualified to optimise each of the above points and make your own decisions more profitable than if you were to carry out these assessments individually.

5. A job done well is a job well done

The above steps are a simplified extraction of certain steps we cover with a client who is following an Aspire Life Plan which is our unique approach that bridges the gap between your present circumstances and your desired future lifestyle. We do this by forming a mutually agreed roadmap to reach that destination, with you remaining the ultimate decision maker at all times.

Call Aspire Wealth Management on 01- 8455827 today or schedule a call back or Zoom meeting on us through our website www.aspire-wealth.com and let us show you how to put concrete financial resolutions in place that will last long after that Gym membership has expired and the ’12 pubs of Christmas’ have become a distant memory.