Financial planning

Your 2024 financial planning checklist

The New Year is a good time to take stock of your life and plans, including your finances. Stuart McCulloch, our Senior Executive Officer in the Middle East, offers some key areas to consider if you’re keen to check your financial position.

The beginning of a year is always a good time to revisit your finances. Wellbeing might be at the centre of your new year resolutions, and if that’s the case financial wellness can play in a key role. With 2024 stretching ahead, a review allows you to consider your plans and set your finances on a path towards meeting your long-term goals. This can help you achieve greater peace of mind – safe in the knowledge that your money is in the right place, working well and building wealth while you focus on other aspects of your life.

Here are a few key areas to focus on when approaching a New Year financial review:

Check 1 – review your budget

Any good financial plan begins with a reality check. Take a look at your income, and your outgoings (including fixed costs you’re aware of and those which might fluctuate). Then consider your financial priorities for 2024, factoring in holidays, additional pension contributions and special events. The 50/30/20 rule can be helpful; set aside 50% of your income for essentials such as your mortgage and bills, 30% for nice to have activities including holidays and travel, and 20% on savings and investments. With high interest rates and high inflation continuing to play their part in monthly budgeting this can be a sensible step to help you feel like you have a handle on the months ahead. It can also be helpful to use separate accounts for different savings. Don’t forget to shop around for the best rates on instant access or cash accounts, and make use of cashback and loyalty schemes for regular purchases.

Check 2 – prepare for emergencies

Having three to six months of living expenses easily available – ideally in a cash or savings account – is always practical. This might be particularly true during more volatile periods, or when economic growth might not be as likely. Emergency funds which you can draw on quickly and easily mean you’ll have considerable peace of mind in the face of redundancy or ill health. Automating any savings into a separate account can help you build these funds gradually, without them being hijacked for other things.

Check 3 – take control of debt

It’s generally useful to prioritise debt – and attempt to reduce or eliminate it as far as you can. If you’ve received an end of year bonus it might make sense to use it to pay off any debt which has a high interest rate. Alternatively, you may be able to consolidate debt and switch it to something with lower charges.

Check 4 – assess your progress

Reviewing your savings and investments will help you understand if your long-term plans are on track. The last few years have delivered more volatile conditions, so it makes sense to take a look at how your plans are shaping up and speak to your adviser to review your position and how you feel about risk. If things look good, have a think about what else you might be able to work towards, including boosting your pension contributions.

Check 5 – consider investment choices

When it comes to your investment portfolio, look again at how your chosen assets (cash, bonds, fixed income and equities) break down. As you move through different life stages you may have more tolerance for risk, and more appetite to take on the volatility in the stock market. With retirement approaching you may want to rebalance your assets towards more conservative options as your attitude to risk shifts. Once you are accessing your pension, you’ll need to think about withdrawing an appropriate amount – you may want to make changes or taper your income if your circumstances change.

Check 6 – update your Will and Estate plans

If you haven’t set up a Will, or reviewed your existing one in the last five years, the start of a fresh year is a good time to make sure your plans are up to date. Having a valid, up-to-date Will is the best way to ensure that your wealth will pass on to those you want it to. Don’t forget to establish a Lasting Power of Attorney so that someone can take control of your financial and healthcare decisions if you become unable to do so. It’s also helpful to look at your insurance coverage and make sure its comprehensive and will safeguard your wealth and protect your loved ones.

The New Year is a sensible time to review your finances and set some resolutions. You can then move forward with the peace of mind that comes from knowing your finances are in good shape.

To discuss any aspect of your financial plan please contact your nearest office.