Basic financial planning

Andrew Spaxman
Financial Planning

With an expensive holiday season now over, it is time to consider what the new priorities for your money should be

A new year can bring new resolutions and ensuring you are spending your money in the right area can be very beneficial in helping you achieve your goals. Whether you find yourself with surplus income that you are able to save or the need to pay off any debts accrued, your first step should be to establish what your income is against your expenditure.

Clearing your debts should be your main priority, with credit cards having possibly been used to pay for the festive season. Paying off any debts will reduce any burden and negate the need to pay any unnecessary interest to the lender. Once these are cleared, you will be able to use this allocated money elsewhere.

Are there other priorities that need to be considered, such as life cover for if you are planning to start a family or buy a house. The amount of cover required will need to assessed and any existing health conditions taken into account, as well as establishing what level of premium is affordable.

Paying off any debts will reduce any burden and negate the need to pay any unnecessary interest to the lender.

The next step should be to establish your saving needs. Are you close to retirement age and would benefit from adding further contributions to your current pension scheme? Are you looking to save for a house and could benefit by setting up a Lifetime ISA? Both benefit from a government tax uplift and the Lifetime ISA can also be drawn in retirement.

You may also be looking to go on holiday this year and rather than using a single months pay or credit card, you may find it easier to save regularly from January, by putting an affordable amount into either a savings account or cash ISA. This will then accrue a small amount of interest and you will be less inclined to spend it, if it is not in your everyday bank account.

There are many different ways of saving money and still meeting your objectives. These can be reviewing charges and costs of any current investments, as well as the interest rates payable on any savings accounts, to ensure that you are receiving value for money.

Any existing protection contracts held might also be available for a lower premium. It is worth assessing the level of cover you could receive for the existing premiums paid, as this could be higher and without the need for excessive underwriting.

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