The New Year is a great time to review your financial situation and set goals for the future. Whether you want to save more, pay off debt, or invest wisely, here are some tips to help you get started on your financial planning for 2024.

1. Set your intentions. The first step to financial planning is to identify what you want to achieve and why. Do you want to buy a house, retire early, or travel the world? Write down your short-term and long-term goals and prioritise them according to urgency and importance. Then, create a realistic budget that aligns with your goals and tracks your income and expenses. 

2. Pay down debt. High-interest debt, such as credit cards, can eat up a large portion of your income and limit your ability to save and invest.  Borrowing costs have increased significantly due to rising interest rates. To reduce your debt burden, pay more than the minimum amount each month, focus on the highest-interest debt first, and avoid taking on new debt unless necessary.

3. Save more. Saving money is essential for building an emergency fund, achieving your goals, and preparing for retirement. Even if you don’t have much disposable income, try to save at least a little bit each month. Every pound counts and can grow over time with compound interest. Set up a monthly standing order to your savings account.

4. Invest wisely. Investing is one of the best ways to grow your wealth and reach your financial goals. However, investing can also be risky and complex, so you need to do your research and understand your risk tolerance and time horizon. Costs are also important when it comes to investing as high management fees and transactional costs can eat into your returns. Seek advice from a trusted financial advisor who can offer personalised advice and guidance.

5. Review your taxes. Taxes can have a significant impact on your financial situation, so you should review your tax situation and plan ahead for the next year. You can take advantage of various tax benefits, such as pension contributions, using ISA allowances, and if you’re married, transferring accounts or assets between you, to help reduce your tax bill. 

By following these tips, you can start 2024 on the right foot and make progress towards your financial goals. Remember to revisit your plan regularly and make adjustments as needed. Financial planning is not a one-time event, but a continuous process that requires discipline and commitment.

January 2024