Two practical financial new year resolutions you can actually stick to in 2023

With the new year now well upon us, it is likely you are taking stock of the year 2022. You might be reflecting on the ups and downs, and the choices you were proud of – along with the ones you’d rather not repeat.

Indeed, in traditional fashion, at this time of year it could be helpful to ruminate on the learning curves you’ve experienced throughout 2022, and look forward to further growth and stability in 2023.

Usually, our new year resolutions are centred around aspects of our lifestyle we wish to improve. Diet, exercise, taking up new hobbies, and quitting bad habits are likely at the top of your list.

However, one aspect of life we often forget to include is financial habits, choices, and goals.

Sadly, many of us don’t stick to the targets we set. According to data published by Discover Happy Habits, after six months, less than half of new year resolutions are reported to be successful.

Sometimes, giving up on our new year resolutions comes down to expecting too much of ourselves – and here at Kellands, we believe in setting achievable goals.

So, here are two practical financial new year resolutions you can actually stick to for 2023.

1. Register or update essential protective documents

Often, you might forego registering and updating essential financial documents – there always seem to be so many things on your to-do list that you simply never get round to it.

However, accumulating substantial wealth without certain documents in place could put your estate at risk. Although it’s hard to find the time, having these measures in place could give you the peace of mind you need this new year.

Here are two essential documents to create or update at the start of 2023.

1. A Lasting Power of Attorney (LPA)

It’s difficult to think about, but one thing that may keep you up at night is what might happen to your family if the unthinkable occurred. Keeping your family and your wealth safe is understandably your number one priority – and luckily, an LPA can help achieve this.

An LPA is a document that allows a nominated attorney (usually your spouse, a close family member, or trusted professional) to take control of your affairs if you become incapacitated. “Lack of capacity” includes if you are diagnosed with a cognitive illness such as Alzheimer’s, or you acquire a brain injury.

There are two types of LPA: one that covers healthcare choices, and another that gives your attorney full access to your finances.

Worryingly, there are many misconceptions around how power of attorney works. A 2022 Lloyds Banking Group survey revealed that 80% of over-55s do not have an LPA.

Plus, almost one-third wrongly believe an attorney is only appointed after you become ill – when in actual fact, an LPA must be registered while you still have capacity.

Without a financial LPA in place, your loved ones could be locked out of financial documents that are in your name while you’re ill – including your mortgage, bank accounts, and insurance policies. This even applies to your next of kin.

If you wish to register or update your LPA in the new year, contact your Kellands financial planner. We can help.

2. Financial protection, including life insurance

If one of your new year resolutions is to reduce your stress levels, protecting your wealth is a great place to start.

It isn’t a pleasant thought, but have you ever wondered what might happen if you were to pass away unexpectedly? Could your loved ones afford to stay in your home, and enjoy your current lifestyle, without your income?

Putting protective measures in place, including taking out life insurance and income protection, is an essential step for any professional with assets to protect.

A tax-efficient payout could provide your family with peace of mind upon your death, rather than them being landed with significant financial stress.

If you are looking to protect your wealth from the unexpected, this new year is the perfect opportunity to get your affairs in order.

2. Assess your medium- and long-term goals, and adjust if necessary

If you already work with us here at Kellands, it’s likely you have medium- and long-term goals in place.

These could include the age at which you wish to retire, how much you would like to leave to your beneficiaries when you pass away, or your target investment portfolio value in the decades to come.

2022 proved to be an interesting year for everybody’s finances, and you may feel some uncertainty about the performance of your portfolio, your annual savings, or your earnings as a business owner. Most investments have taken a downturn this year, so it’s important to remember you are not alone in this feeling.

However, a new year often signifies a fresh start – and while 2023 could bring new challenges, thinking practically can be constructive.

So, scheduling a sit-down with your financial planner in the new year to review your medium- and long-term goals could be extremely beneficial.

In your conversation, you may cover:

• Your planned retirement age, and whether this remains viable or needs to be adjusted
• The long-term performance of your investment portfolio, where your Kellands financial planner can answer any questions you may have
• Any additional or one-off expenditure you might expect in 2023, such as helping adult children as they head to university or buy their first home
• Using your unearned income allowances before they reduce in April 2023
• Whether your pension is ready to fund your retirement lifestyle when the time comes
• Any anxieties, worries, or positive reflections you might have about your wealth circumstances as we head into a new year.

Assessing these factors with the help of a professional this January could help you begin the year with peace of mind and confidence.

Get in touch

For help with setting and sticking to financial goals in 2023, email us at hale@kelland.co.uk, or call 0161 929 8838.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

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