New Year’s Resolutions vs Financial Life Goals

A New Year is upon us and as such, many of us will look at our lives and resolve to do things better over the coming 12 months in the form of New Year’s resolutions. 2021 is likely to be a year that more of us than ever look to resolve to do better in certain aspects of our lives – bearing in mind that events of 2020 may well have hijacked many people’s plans.

Despite the fact that an estimated 50% of Brits make New Year’s resolutions, according to statistics, 90% of these are broken within the first six weeks of the year. As well as fitness and nutrition, financial goals are often amongst the most popular resolutions, with many people resolving to be ‘better with money’ or ‘save more’.

Against the backdrop of the Covid-19 pandemic, it’s clear that the plans you may have for a year can be severely disrupted through no fault of your own. So instead of making a New Year’s resolution regarding your money, perhaps you should look at the bigger picture and consider your financial life goals…

Setting financial goals

Putting suitable financial goals in place will often depend on your age and personal circumstances. If you are working towards one of life’s first big financial goals, such as buying a house, the way you go about saving will be different to if you’re planning for retirement.

One commonality that working towards financial goals creates regardless of whether this is for the short or long-term is it establishes some discipline in your personal financial balance sheet. If you do not have financial goals that you are working towards, you will be more likely to spend rather than save. Knowing what you are working towards and tracking your progress can be highly motivating and certainly rewarding over time when targets are achieved and you start to reap the benefit of your hard work.

Secure what you have

The Covid-19 pandemic has shown us that anything can happen, and even those that have a relatively stable financial position can be easily derailed by an unexpected event. This is one of the reasons why life and critical illness insurances are referred to as ‘protection’ products within the financial planning industry, as they are there to protect an individual or family’s wealth in the event of a tragic occurrence.

Whilst having something in place is better than nothing, many people significantly underinsure their life and health compared to other material items in their lives. A financial planner can help to advise on what types and level of cover may be suitable for you and your family, providing both protection and peace of mind.

Review and revisit

Financial planning is a journey rather than a single one-off event. Once you have engaged in the process, regular reviews will help to establish where you are in terms of reaching your goals and what you may need to adjust in light of a change in any circumstances.

In the grand scheme, a year is such a short period of time, and when it comes to financial planning, an arguably better way to proceed is to make more general, wider-reaching life goals and plans.

To discuss having a rethink of your financial goals and put plans in place that will make a long-term difference to your life, get in touch with one of our financial planners.

 

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