Financial Resolutions for 2022

With the Christmas season over, Private Client Consultancy is gearing up for the year ahead.

At the beginning of every new year, so many of us set ourselves up with a list of resolutions to try and become better versions of ourselves. However, new year’s resolutions can be hard to stick to. Therefore, we would like to provide you with a guide that will make it a bit easier to achieve your financial goals for 2022.

Build savings

When it comes to financial resolutions, saving more is almost always at the top of the list. A good place to start is by building up your emergency fund. While it is always a good idea to have savings for a rainy day, an emergency fund can be useful in other ways. For example, it can help you avoid liquidating your assets at depressed prices when markets are particularly volatile.

What you will want to consider next is if you are making the most of your savings. Some accounts only allow you to earn as little as 0.01%. If you can get at least .5% interest on a balance of any size, this will help you start earning more income. Additionally, if you have several different small accounts, you can bring them together to access a more effective interest rate. Of course, this can also help with managing your expenses more effectively.

Clear your debts

Managing debt can be stressful but reducing and consolidating it will help relieve your tension. For example, if you have recently been given a pay rise or have taken a higher-paying position, it may benefit you to put this extra income towards your high-interest balances. Additionally, you may want to discuss strategies for reducing your loans in a cost-efficient way with one of our advisers.

Improve your credit score

Bad credit scores often prevent people from being approved for loans, credit cards, and mortgages. Not only that, but you may also be charged higher interest rates solely because of a poor score. Therefore, it is imperative to obtain a decent credit score.

The first step to improving your score is actually knowing your score. Keep track of how you’re progressing and conduct annual credit reports to stay on top of it. 

The next step is to pay off your credit card balance on time each month. There are convenient ways for doing this, which may include setting up autopay and ensuring you will have sufficient funds at the time of payment by setting aside money for this purpose.

Lastly, pay off your debts as soon as possible. This will not only raise your score, but it will also prevent you from having exorbitant interest fees.

Keep track of your pensions

Typically, people work multiple jobs throughout their lives. Because of this, many have pension funds that they have either lost track of or forgotten they even exist. Tracing old pensions can be a time consuming and tedious process, but it is necessary to obtain the funds you are entitled to. Our advisers can make the process less stressful by helping you track down your pensions. Once you have traced your pensions, you may want to discuss with a professional whether it would benefit you to move all your funds into one place.

Additionally, if you can afford to max out on what your employer contributes to your pension, do so. This will increase your retirement pot. You should also review your national insurance record to ensure that you have been credited for every year you’ve worked. There are specific benefits you can claim if you are, for example, a couple with children. This has the potential to add a significant amount to your pension in retirement.

Make better investment decisions

One of your new year’s resolutions may be to invest in a way that reflects your values and beliefs. If you are unsatisfied with the way you have been investing in the past, it may be time to sit down and contemplate what other options you have. Therefore, you may want to consider ESG investments. Private Client Consultancy is committed to putting sustainability at the center of our investment process while still seeking returns. Speak with an adviser about how we can help you with these kinds of investments.

You may also want to review your portfolio to examine whether it is diverse enough. Spreading your money across a large range of assets and markets will allow you to maximise your opportunities for larger returns. When reviewing your portfolio, there are three elements you will want to consider: 1) Are you investing across multiple different countries or regions? 2) Do you own both shares and bonds? And 3) How much variety is there within the sectors you own (i.e., technology, retail, etc.), and can you do better?

Speak to an expert to maximise your returns.

Consider your life goals when managing your finances.

What all of this planning ultimately leads to is providing you with a comfortable life in your retirement. Therefore, it is important to remember the end goal and whether you are still on track to achieve it. Keep your specific saving and investment goals in mind with every financial decision you make. If you feel you have deviated from your retirement plan in any way, speak with your adviser about how to get back on track.

It pays to start planning early, and our experts will help you stick to your resolutions. If you would like to discuss your plan with a qualified adviser, please get in touch with us.

Finally, we at PCC would like to wish you a very happy and prosperous new year.