Getting your finances in shape for 2024
- Leanne Lancaster, Personal Finance Writer
- 22 December 2023
- 5 mins reading time
The new year is a popular time for people to make significant, positive changes in their lives. This typically includes joining a gym, quitting a bad habit or taking up a new hobby.
These are all great ideas, but January is also a great time to get on top of your finances. With a few simple steps, you can address your finances and get on the right track for the rest of the year. Here are five ways you could quickly and simply get your finances in tip-top shape.
1. Identify and set goals
The start of the year is a great time to make plans, and you may have some big milestones coming up in the next 12 months. For instance, you may have a child or a loved one starting school or university. Or you may want to make some major home improvements or move house. Sit down and figure out how much you’ll need to save for the big expenses that are coming up, then, make a savings plan to cover them.
A simple yet effective approach can be to work out your monthly outgoings (mortgage, bills, etc.) and then deduct these from your monthly post-tax income. Once you have figured out what you’re left with each month, you can decide on an amount that can be set aside to contribute to your goals. You can make this easier for yourself by setting up a monthly direct debit into a separate savings account, automatically topping it up every month.
2. Spring clean bank accounts
We accumulate direct debit payments throughout our lives but over time some of these become no longer needed. For instance, are you still paying repair coverage for a product you no longer own? Or insurance for a house you don’t live in anymore? It may sound fanciful, but these things happen and over time can take a big bite out of your finances. Go through them all and verify them – then cancel anything obsolete.
For those remaining bills, consider moving them to the start of the month if you can afford to pay them all at once. That way whenever you check your account later in the month you do so safe in the knowledge there are no further costly direct debits to cover.
3. Set debt repayment plans
At the start of the year, take stock of your debt obligations. Once you have a better idea of your overall debt situation, and how long it will be until you have paid each debt off, make a repayment plan. Like setting aside an amount to save from your net income, calculate how much you can allocate for your debts.
4. Track down/consolidate accounts and products
There are currently billions of pounds in ‘dormant assets’ in the UK, which are spread around a multitude of unclaimed financial products. This includes money sat in former employer pension plans, bank accounts, ISAs and insurance products among others, forgotten by owners or simply misplaced.
If you find a dormant account it would clearly benefit your finances. The good news is finding dormant assets is free, and you can do so on tools including ‘My Lost Account’ from UK Finance, the Building Societies Association and National Savings and Investments, and the ‘Pension Tracing Service’ run by the government.
5. Engage with advice
The above are a few simple steps you can do by yourself. But to make the most of your finances – and 2024 – engaging with a financial adviser could be the best option. A qualified financial adviser will be able to create a plan built around your goals and priorities. They can offer advice about financial products and investments that may help you achieve your goals and answer any questions you’re unsure about.
Remember that the value of investments and the income from them can fall as well as rise and is not guaranteed. You may get back less than you invest.
Getting to grips with your finances in the New Year can be daunting. After all, money is often a taboo topic in the UK and many of us are not well informed about our finances. For this reason alone, it may be worth speaking to someone who advises investors for a living. If you want help to get 2024 off to the best start possible, get in touch with the Schroders Personal Wealth team today to arrange a quick chat with one of our financial advisers
We'll begin with a free, no obligation conversation to understand if our service is right for you. There are no hidden fees or charges, and you’ll only pay if you choose to go ahead with the recommendations in your personalised financial plan.
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We'll begin with a free, no obligation conversation to understand if our service is right for you. There are no hidden fees or charges, and you’ll only pay if you choose to go ahead with the recommendations in your personalised financial plan.