5 financial housekeeping jobs you can do now to prepare for the new year

Category: News

You might be planning to make health and wellbeing resolutions this new year or be considering ways to live more sustainably.

Equally, you might be focusing on your finances and looking to start the new year in good financial shape.

Keep reading to find out about the five simple housekeeping jobs you can do now to make a huge difference in the new year.

1. Think about your goals for this year

While we often talk about the importance of long-term plans and patience – especially in relation to investing – it’s sometimes useful to concentrate on those things nearer at hand too.

Starting to think about what you want from the future is the best way to understand your desires, and to begin building plans to make those goals a reality. This approach holds for long-, medium- and short-term goals.

What do you want to achieve financially over the next 12 months?

Make a list of the financial goals you’d like to meet, and you’ll have a reference point against which to track your progress as you head through the year.

2. Revisit your household budget

To make your financial goals a reality, it might be necessary to recalculate – and potentially adjust – your household finances.

Make a list of your incomings and outgoings. You might find you have more disposable income than you thought, or you could uncover patterns that highlight where savings can be made.

Starting the year with a firm grip on your expenditure will help you to form good monetary habits over the next 12 months and beyond.

3. Organise your paperwork

You no doubt have all of your insurance, banking, and pension documents kept safely. But do you know where?

Take the time over the coming winter months to sort through your paperwork. Find the names and addresses of your providers, as well as the policy and account numbers for each scheme and plan.

You might need to contact some providers to confirm that your plans remain valid or to get valuations. You might also find that you have lost touch with some products. If you are sure you have a pension, but can’t find the paperwork, consider using the Pension Tracing Service to track it down.

Once you have all the information you need, compile an In Case of Emergency (ICE) document.

This is a single place where you can collate all the details someone would need if they wanted to look after your affairs in the event of an accident, illness, or death. Once you have the document, you’ll also need to make sure that someone you trust knows it exists, and where it is kept.

You might consider a digital copy, but make sure the passwords are held somewhere secure and always keep a hard copy too.

4. Revisit your retirement plans

Whether you are approaching retirement or already retired, the hard work isn’t over.

Topping up pension contributions or exploring the options you might take is a great way to spend your time this winter. You’ll need to think about how your chosen option aligns with your desired retirement lifestyle, and factor in the other income streams you’ll have in retirement.

Lump sums might be perfect for one-off expenses but if you intend to use the money to cover regular bills too, you’ll have to budget carefully. You’ll also need to think about the effective value your cash could lose if you hold it in a bank account once it’s withdrawn.

Take a look at the amounts you are withdrawing and match them to your incomings and outgoings. Are your current levels of withdrawals sustainable?

5. Prepare for tax year end

The Spring Budget this year saw several freezes to tax thresholds and allowances, many of which are due to remain in place until 2026. With a new tax year on the horizon, start preparing early and be sure to make the most of the allowances that exist now.

The pension Annual Allowance is £40,000 for the 2021/22 tax year. This is the amount you can contribute to your pension while still receiving tax relief. If you haven’t made full use of this yet, you still have a few months remaining, so budget for these additional contributions now.

Remember, too, to check for any unused allowance from previous years as this can be carried over from up to three years ago.

The ISAs you hold are also tax-efficient. Be sure you make full use of the £20,000 ISA subscription if you can afford to. The limit applies across all ISAs you hold, but it is important to note that your ISA Allowance can’t be carried forward. If you don’t use it before the end of the tax year, you lose it.

Get in touch

Starting the new year in good financial shape gives you a great foundation from which to build stability and sound monetary habits for the year ahead.

If you’d like help managing your pension contributions or withdrawals, or you’re preparing for tax year end, get in touch. Please email hello@globeifa.co.uk or call us on 020 8891 0711 to discuss how Globe IFA’s expert financial advisors can help you.

Please note

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. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.