Did you make New Year’s resolutions this year? If you did, and you’re still keeping them, then it seems you’re part of a select group. According to Strava, the majority of good intentions fall by the wayside as early as January 12th – what they term ‘Quitters’ Day’. A massive 80% have bitten the dust within three months.
As the gym becomes less appealing – and that annual membership looks only to thin your wallet, not your waistline – perhaps it’s time to switch attention to a different type of resolution. You’ve tried personal training, now try financial advice instead.
Financial wellbeing is something that many people struggle to make a habit of – perhaps even more than committing to the gym or banishing crisps and chocolate. And that’s if they are even thinking about it at all. A poll of UK adults showed that finance didn’t feature at all in a list of the most common resolutions. While research has suggested that two-thirds of Brits don’t start making financial plans for their retirement until they hit 50.
Because financial planning is for the long-term, and you won’t be able to admire the results for years to come, it’s easy to keep pushing it back. But whatever your plans and ambitions, this will nearly always be a mistake. After all, later can so easily become never. Here’s a few reasons to consider making now the best moment to get your financial house in order.
1. With investment, sooner is always better
Procrastination is one of the great vices of financial planning. When you are thinking in decades, it can feel like the issue isn’t pressing, but that’s a false sense of security. The truth is, even if retirement is some way off, most of us have less time than we think to make the most of our money.
To put it in perspective, one study has calculated that the average return on the cost associated with retirement planning is 4,336% for someone who starts aged 35 (and retires at 65). Which sounds great, until you consider that someone who gets financial advice a decade earlier stands to see a 5,813% return on the cost of their financial advice. The longer you leave it, the lower the returns are likely to get.
The simple reality is that time is one of the most important ingredients in successful financial planning. The longer we give our investments to work, the better our prospects. Which means there really is no time like the present when it comes to sorting your finances.
2. Now is a good time to catch up
It’s always the case that now is better than soon, but the New Year might be the best possible time to start making investments. Perhaps you’ve just received your annual bonus and want to put it to some long-term use. Or you might be realising that another year is going by in which you aren’t making full use of your ISA allowance (or you might be asking: what allowance?)
With the end of the tax year on the horizon, now is the ideal time to ensure you’re taking advantage of the annual tax advantages open to all of us (principally £20,000 that can be saved or invested in ISAs, free of tax on the proceeds – though remember, your own tax treatment will depend on your particular circumstances). Act now to avoid missing the window for another year.
3. Financial advice can keep you on plan
If you’re worried that your financial resolutions will go the way of all the others, then it’s probably worth getting some financial advice. Think of an adviser as a personal trainer for your investments. They help you to shape a plan that meets your needs, then make sure you stay on track. With an adviser, you get the expertise of someone who is investing on behalf of clients all the time, the perspective of someone with a helpful bit of distance, and the dedication of someone who will ensure your plan stays on track.
Let’s put it this way. By getting some qualified financial advice, you can make sure that improving your finances is one New Year’s resolution that doesn’t get forgotten.