With 2016 approaching, now could be a great time to take stock of your finances and set some objectives for the New Year.
As a new year approaches, many people resolve to take control of their finances in the new year. So why do so many of them fail to do so?
Possibly because they fail to break it down in to smaller, actionable steps they can take to make better use of their money. Here are 6 things you can realistically do in 2016.
- Make a will.
This is a classic example of a task that many people continue to put off. Making a valid will is neither difficult nor particularly costly, but without one you can’t be sure that your money will go where you want it to in the event of your death. Even if you already have a will, if your circumstances have changed you should consider getting it reviewed.
- Save more.
At some point in your life, you may need some savings to fall back on. A NISA (New Individual Savings Account) now offers a generous £15,000 tax-free allowance, which you will lose out on if you’re not already making use of it.
- Face up to getting older
Saving for your retirement is your own responsibility. There have been many changes to pensions legislation and regulations in recent years, so it pays to take a more active role in ensuring that you are saving enough. If required, seek out the necessary advice to make sure that you will be ready in good time for your preferred retirement date.
- Look to pay less to the taxman
HM Revenues & Customs (HMRC) estimates that up to 4 million employees may have overpaid tax, so it is worth doing some research to ensure that you’re being tax efficient with your money.
- Plan for your family’s future
If you have life policies in place, are they still adequate for your needs? For example, if you may need to pay school or university fees in the near future, is the lump sum under your current policy enough to cover these as well as your other outgoings? You should also consider inheritance tax – as property prices increase, so does the potential for inheritance tax liabilities for many families.
- Keep your finances up to date and in order
Managing your finances is simple, as long as you have a system in place to begin with. A new year is a great opportunity to create a system to organise and track your relevant paperwork. If you have savings and investments, you may find that you can view your portfolio online, to save yourself some paperwork. Even if you simply create a paper file for each area of your finances – such as savings, pensions and investments for example – you will then be able to file and retain any new correspondence as and when you receive it.