Three financial priorities for 2024

With 2024 in full swing, now representrs a great time to get your financial priorities for the year in order. To help you on your way, Tim Bennett, has outlined his three priorites for the 12-months ahead in the below article.

Three financial priorities for 2024

 
The start of a new year offers the opportunity to reflect and goal-set. For many, this includes a close inspection of their personal finances. In order to reset and make sure you are prepared for what lies ahead, Tim Bennett, Head of Education at Killik & Co, outlines three key areas to think about in January.
 

1. Revisiting personal and family goals
2. Ensuring you are set up to expect the best, whilst being prepared for the worst
3. Not missing key deadlines

Revisiting goals

 
One of the key planks of wealth building is planning. When done successfully, it encompasses two basic features – structure and flexibility.

Having structure is all about knowing what you want to achieve, as an individual or a family, by when, with whom (just you, you and a partner or maybe other people, such as children or ageing parents) and working out how much it will all cost. If you have not sat down and considered these sorts of factors at all, now is a good time to start.

Next comes the ability to adapt an existing plan as circumstance change. A new year is a chance to look back what has changed in your life over the past twelve months – to which the answer may legitimately be “not much” – and how your finances have evolved. An an example, this could be  changing jobs, selling a business, getting married, or receiving an inheritance.

In that overall context, it is worth revisiting portfolio performance to date against both where you hoped to be now and where you would like to be in the future. Any financial plan should also build in new opportunities and challenges.
 

Expecting the best whilst preparing for the worst

 
This is all about developing the right mindset. The best investors are often “realistic optimists.” That means they are fundamentally positive, but not to the extent of overlooking potential risks. The sorts of questions that someone who gets this right should be able to answer include;
 

• What will I do if stocks drop 20%?
• How will I deal with a personal disaster like losing my job?
• What is the risk that I miss my financial targets (because my Christmas bonus was not as high as I had hoped, for example) and what will the consequences be in terms of my plan?
• Am I still on track to stop work when I want to and what am I prepared to do to ensure that I do?

 
The point about questions like the first two is not to force someone to panic or unduly de-risk. Rather it is to prompt them to revisit their goals against the backdrop of their attitude to risk, and then review whether they are set up accordingly in long-term portfolio investment terms.
 

Hitting tax deadlines

 
There are two key dates worth keeping in mind. One is 31^st January, which is the deadline for filing self-assessment tax returns. The results of not doing so on time can be fines and interest penalties, alongside a pile of unnecessary stress. HMRC revealed last week that almost 5.7 million people haven’t yet filed their self-assessment tax return for this year, so make sure you aren’t one of them! More positively, getting a tax return done on time can bring some considerable tax benefits in the form of claiming relief for things like pension contributions (as a higher or additional rate taxpayer), or gifts to charity.

The other date worth thinking about is 5^th April. This is when many of the “use it or lose it” tax shelter deadlines expire for things like ISAs, JISAs and SIPPs. It is important to look at how much of the annual allowance you have used up in each case already, and then start to think about how much of the unused annual allowance you might be able to make use of before 5^th April.
 
In both cases, the more organise you are now, the more you will thank yourself later.
 
Tim Bennett is Head of Education at Killik & Co