December 5, 2024
As we look towards the end of 2024 and the New Year, how focused are you on your financial goals? Perhaps you are looking no further than the need to submit your tax return in time for the deadline at the end of January.
If, on the other hand, you want to make 2025 the year you take control of your financial future and make significant steps towards financial freedom in later life, it’s time to consider your 2025 goals.
Financial planning for longer lives
Recently arrived on our desks at Talis IFA is Canada Life’s Life100+ report. This highlights clear demographic trends towards longer lives. In the UK, by 2050 we can expect to see a 90% rise in the number of people reaching the age of 80 and above. That’s more than 6.6 million people.
We’ve talked before about how attitudes towards retirement are changing, morphing from the old model of a three-phase life: education, work, retirement, towards a more flexible approach to a multi-stage life.
At Talis IFA, we advocate a long-term approach to financial planning (we call it our ‘get rich slow’ approach). The other important thing we always aim to get across is that, whilst it’s true to say that it’s never too early to start planning for financial freedom, it’s also never too late to make a difference.
So whatever stage of life you are at now; whether you are saving for your first home, focused on building wealth, approaching retirement or considering how best to pass on wealth to the next generation, staying in control of your finances is key.
Here are our suggestions for your New Year’s financial resolutions:
Before setting new goals, it’s important to understand where you currently stand financially. Review everything: income, expenses, debts, and savings.
This is important. SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound. Vague resolutions like ‘save more money’ give you nothing to aim for, nothing to track, and are less likely to make a difference. Aim for specific goals, such as ‘make full use of my tax-free ISA savings allowance’ or ‘save £500 every month this year’.
Your goals might also include paying off debt, or ensuring that you have a sufficient emergency fund to cover three to six months of your fixed expenses.
Most of our clients don’t have a budget when they first meet us because they know they have disposable income. But if you only save what’s left over at the end of the month, it’s much harder to create the SMART goals mentioned above. So, list all your sources of income, and identify all your fixed expenses. Once you have a clear idea of what’s left over you can allocate funds for variable expenses and savings. Review your budget regularly throughout the year, and adjust where needed.
If you don’t already have a plan, it’s never too early or too late to start.
If you’ve never done it before, though, where do you start?
This is where the advice of an experienced IFA can begin to help. Talking to a Talis IFA might surprise you. Where you might expect a conversation to begin with the numbers, you’ll find that we take a ‘life first, money second’ approach. This means that, while the numbers are important, we’ll first help you to build up a picture of what you want your life to look like in the future.
Then we’ll look together at what your financial situation will need to be to support that. Only once you understand where you need to get to, will we recommend the options available to you to help you do that.
Armed with our plain-English advice, you’ll be able to make confident decisions about what’s most appropriate for you.
The outcome will depend on where you are currently, both financially and in terms of your stage of life.
Take control for greater life satisfaction
One key finding from Canada Life’s Life100+ report is the impact that feeling in control has on how satisfied we are with life, and in turn how that affects our wellbeing. Around 90% of people who reported feeling in control also said they were satisfied with life, compared with just 65% overall.
People who set goals are more likely to feel in control, so if you want 2025 to be the year you take control of your future life, it’s time to get goal-setting.
If you’d value some help to get started, talk to a Talis IFA about taking control of your financial future.
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