Well what a year 2020 has been, a memorable one but not perhaps for the right reasons.

Unusually this year has seen all our lives changed in some way or another whether it be home schooling, working from home or not being able to see our family and friends. Most of these changes have been outside our control which has certainly felt unnerving at times.

Despite this, we do know that Christmas is still just around the corner and over the next few weeks we will all be reminded frequently of the number of shopping days until Christmas.

At this stage many of us start thinking about planning for Christmas and how much it’s all going to cost. You might begin by writing a list of all the people you need to buy presents for and then thinking about how much you will spend on each person. You’ll also be thinking about what extra food and drink you’ll need and the cost of the big Christmas food shop.

Whilst many people follow this approach we all know someone that’s been buying presents since January and somebody else that will be leaving everything until the last few delivery days before Christmas.

This got me thinking about the similarities of planning for Christmas and what we do every day as lifestyle financial planners. Many people might have a plan for Christmas but very few have a plan for the rest of their lives. Even a very basic plan is certainly better than having no plan at all.

A good place to start is creating a budget and thinking about the cost of your lifestyle now and how this might change in the future. What else do I need to pay for such as children’s education, more holidays, new cars etc.

Once you have an idea of the costs, you can then start thinking about how you might pay for it, how much you need to save or how long you will continue working for. It is also important for you to know how your income will change in retirement.

You then have a basic plan to work from. You’ll be able to calculate how much you can afford to spend or how much you need to save. Unfortunately many people live day to day and leave it too late.

If you’re a business owner, have you thought about what happens when you want to stop work or perhaps reduce the number of days you work each week. In most cases building an exit strategy from a business needs careful planning and time.

One important consequence of planning, whether it’s for Christmas or for the rest of your life, is that you’ll start feeling more organised, you’ll be less worried and start feeling happy and positive about the future.

A bit like the Christmas shoppers that start planning early – when everyone else is frantically looking for presents and worrying about how they’re going to afford it, they’re at home with a warm mulled wine and all the presents neatly wrapped under the tree, ready to enjoy Christmas.

 December 2020