How’s December going for everybody? This year I feel relatively chilled, but this is mainly down to the fact that I actually took my own advice and budgeted for it. I also planned out how much I was going to spend on who and appear to have stuck to it! I do think some of this has been easier due to the restrictions and not being able to get to the shops as much though.
I know I’ve said many times before but the route to a financially successful anything, including Christmas, is the planning.
Using your budget planner to incorporate your Christmas spending is the key to your plan materialising. I check my budget monthly and adapt the plan when I know that I ‘need’ a new top or alike. Isn’t it easier if you get to November knowing that your Christmas spending pot is just sat there waiting to be spent? Don’t forget to, not only include your gift budget, but also your food (don’t forget those sneaky boxes of chocolates) and drinks. Whether that be alcoholic or not, the majority of us take time off over the festive period and will be consuming so much more than a normal average week*. I actually think that the alcohol element of the shopping is the part that racks up the cost. I usually plan a bulk alcohol shop via a mix of Costco and a supermarket when they have a 25% off 6 offer. That way I can cater for all and am not paying full price!
I have done a quick browse to see what’s around for ease I haven’t checked all providers and couldn’t tell you which is the best offer at the moment. For me, buying what you already intended to and at a discount is win-win.
Another Christmas shopping tip - do your food order online where you can. This will stop those additional non essentials jumping into your trolley. Not only will our bank accounts be appreciative, most likely our waistlines too, ha! This is more of a 365 day of the year tip but especially at this time of year..!
How have you found 2020? Without speaking about the obvious, have you chosen this year to carry on, stop or start any traditions? Does anybody still send Christmas cards to friends? I have personally handwritten a card for each and every one of my clients at the weekend (apologies if I have missed anyone), as the years go by, the more challenging this is becoming but always something that I intend to do. I think, as a client, it’s nice to receive that personal touch. I also try send a handful of gifts too, to those that have particularly supported the business throughout the year. I think being thankful and showing appreciation is important.
Nobody ever got hurt by being kind did they..?
Does anybody else have these struggles?
I actually think that I just find this time of year so much more emotional, full stop. The early dark evenings have such an impact and even more so at the moment, considering there isn’t much to do, makes me want to snuggle up and get into bed at 6pm, haha.
All I can say is that I am really looking forward to next year and am hopeful that after this VERY strange one, that we are able to enjoy ourselves and live our lives a little more freely.
I hope you all have a fab festive period and I will be back in the New Year to check in with your new year budgets and to give you lots of my new, strategised financial planning tips.
Thanks for checking in,
Much love, CW x
*please drink responsibly. Drinkaware.co.uk
I’m always meeting clients new and existing with a varied age range, usually between ages 20-80 and for me there is no preference to one over the other. My favourite bit is that, no matter where the client is, on their journey, I can adapt the advice that I give to their individual circumstances.
Recently I helped a young client to start saving for their future and saved them a chunky sum of income tax. At the other end of the scale, I recently helped a 70 year old client put a plan in place to reduce her potential inheritance tax bill by around £60,000. I know that the majority of us are in our investment growth stages, so at this time, inheritance tax planning isn’t so important. Although, I don’t know about you? But time is literally passing me by and sometimes I forget that each time another birthday comes and goes, that I actually do get older in age too. I still feel the same as I did 10 years ago! I’ve also helped some new homebuyers look at their protection options, to make sure they are able to provide for their families, should worst come to worst.
How do you guys feel about the work that you do? Are you in your forever career?
I think for me, feeling needed in my job role is important. I especially like the fact that my job can change somebody’s financial position to the point that they are able to achieve their personal and financial goals. Whether that be to retire at an earlier age or to diversify their investment portfolio to give them those additional income streams, no day is the same. Covid has actually really had an impact on me and my work life. Before now, the best part of it, was getting out and meeting the people, building relationships with new clients and business contacts, by way of networking, to generate new business and client referrals. All of that came to a halt in March and the way that I carry out business has had to be changed. I am fortunate to have been able to adapt my business but taking everything online has been a definite challenge, not what I signed up for to be honest. I know so many of you have been affected too and I think it’s important that we share our stories. In August, I actually had a mini meltdown and fell out of love with my job. The job I was doing, was no longer what I had signed up to and I was confined to the walls of my home and carrying out all of my meetings via Zoom. No face to face interaction for such a long period of time finally took its toll on me.
Since then, I have taken a couple of breaks from work and am gradually meeting more people face to face again. That’s the best bit for sure!
How do you feel about taking financial advice? Did you know that it’s relevant to everybody, no matter where they are in their life stages and no matter what their ‘wealth’ status is? We don’t know what we don’t know, so without advice, how can we become more efficient?
The foundation of a great financial and future plan, is to look at protecting you and your family. After this it’s often down to personal preference. Pensions, investments, tax efficient savings and sometimes looking at purchasing additional properties. Each client has a different objective and I am here to help them to achieve that...
I am looking to take on 6 new clients before the end of the year, who want to start looking at their financial planning goals and look to their financial future. If this is you and you have any questions, you know where I am.
Next week on the blog I am going to cover off Covid and the impact this has had on our investments. I will use some actual client data (minus names and specific identifiable information, of course) to highlight how different investments have been impacted over the period. I think you’ll be pleasantly surprised as to how the portfolios have performed and the majority of my clients are actually still within a positive growth period. *unfortunately I am unable to guarantee performance of funds moving forward but if you have read any of my other blogs, it’s more about the time horizon that you have to invest vs the risk that you take.
Anyway, thanks for checking in and as always please pop me a DM or email with any questions.
For me, September has completely ran away but I think it has been relatively productive and has involved lots of planning.
I have taken a good amount of time to plan in some personal and business goals, most of which are to be achieved by the end of the calendar year but some the financial year (5th April). I thinks it’s good to have goals and aspirations, otherwise do we really know what we are aiming for? I’ve been really detailed in my planning and have been as specific as I possibly can be.
This month, work wise has been super busy, this is why I thought I would ask what September has meant for you? It seems that the children have returned back to school and lots of you are getting in touch to start getting your financial ducks in a row, before the man in his big red suit comes down the chimney! Some of my posts over the recent weeks have been focused on retirement planning and pensions. In-case you haven’t seen those, did you know that there is an estimated over £2billion pounds of unclaimed pensions which have been effectively lost or forgotten about. Based on our average population that’s around £13,000 per person. I know I’d like to keep a handle on an additional lump sum and invest it for my future. Not only are people wanting to search out and amalgamate their pensions, they are looking at ways they can save on income tax before the end of the financial year. Pensions are an amazing way to do this!
For all you self-employed people, have you completed your tax return yet ahead of the 31st January deadline? If yes, great news. If not, you might want to think about doing this sooner rather than later so that you can make sure you have enough set aside to pay the bill...Do you have a separate account where you save for your tax bill? I have to do this otherwise I end up spending the pennies that I shouldn’t really be spending! My point here is that if you have some spare money and are considering investing for your future, now is a great time to do so. You are buying in, at a time where the stock market is relatively volatile, therefore your return on investment has better potential. If the contribution is made before the end of your tax/company year end, all money paid in is free from income and corporation tax, just this alone means at least a 19/20% relief. There is NOWHERE else that can give you this return, plus some potential investment growth.
CW’s weekend tip:
DON’T leave finding your Tax-Bill money until the LAST MINUTE...
This itself can create angst and worry that can knock your overall goals off course. I’ve been speaking with a few of my accountant friends recently and it seems that people generally scrap around to find their tax bill money rather than plan for it. I on the other hand, LOVE a plan, if you hadn’t gathered already. So I plan mine on a monthly basis and set aside as if I was employed. One of my first jobs for May, following the end of the financial year, is to get my accountant to submit my tax return so I have the next nine months to plan for any deficit and of course spend any surplus saved! Next year I’m hoping for a shiny new, bigger and better handbag. I only allow myself to buy one a year (or so)!
This month I am continuing to plan and would love to hear from you about financial planning topics, that you would specifically like to hear about from me, over the next few months. Lots of you kindly let me know, that you would like to read about the impact that Covid has had on our pensions and investments, this is in pipeline. It is also important to note here that, the longer you have to retirement, the less important this blip in the stock market is. There will always be a Brexit or a Covid or a something that is effecting your investments. Providing you have a good financial planner and time on your side, what goes down, generally comes back up and often better.
I’ve also had a little bit of a restructure of my week and decided to free up Friday’s for a bit of ‘me’ time. I think sometimes because I love my job so much, I get totally consumed and forget that I have to love me too. This actually started from this week...it feels great and I think I have been so much more productive Monday to Thursday because I knew there was a reward. Working for rewards, is a much better approach for me, otherwise I’ll always leave a tasks until tomorrow, tomorrow takes a while to come around and I end up with bits hanging over my head. I’ve also decided to turn off my social media notifications. I’ve found that since lockdown it consumes a lot more of my time and that I’m very reactive. Moving forward I will check my apps a couple of times a day but look forward to enjoying a clearer headspace and achieving my goals!
As always, I am here and happy to help with any questions that you might need answering. I hope to hear from you soon.
The longer the investment period, regardless of the amount and what type of investment it is, the better the compounded interest result will be. In my opinion, we should all have a money plan for today and tomorrow, without forgetting the longer term future. We all become accustomed to our lifestyle, is it worth the risk of not being able to continue as we are used to into our retirement, just because we didn’t take advice and plan early enough?
So, what types of things should we be classing as retirement planning? The natural obvious one here is pensions. Pensions get a real mixed bag of reviews. I think people have had good and bad experiences and don’t fully take advice before completely ruling one out...a pension is the only form of investment that is going to allow you to claim money back from the tax man. Yes you heard it, THEY give YOU money back from income in which you have already paid tax on or relief on income that you are due to pay tax on. Win, win right? Depending on your income tax bracket, will depend on the amount of relief that you will be eligible to claim but the basic standard is around 20%. Do you know of any other investments that would guarantee you to recoup that type of saving? It doesn’t exist! Pension planning doesn’t stop for those that are generating an income, non-employed people are also allowed to claim basic rate tax relief, but with a different annual allowance. I touched on this earlier in the week in one of my posts. For a non employed person or a child, you are able to make an investment into a pension of £3600. This amount invested would actually only cost you £2880, no brainer! *note, we are unable to access our pensions until age 55, but saving into a pension for our children will allow them to feel less financial pressure as they go through life. Not only is it a great to save for their futures, it is also very educational by way that they get to understand the different tax advantages that their pension is offering them. I should also mention here that parents and grandparents are the only family members who are able to make contributions on behalf of children. This can be a great ‘Inheritance Tax Planning’ strategy for our parents to utilise but that’s one I’ll save for another day!
Previously, I have also mentioned the effect that compounded interest can have, in relation to contributing to a pension for a child. I have taken this from an article and have referenced the source.
“?Research shows that stock markets in developed countries across the world have provided average annual returns, with dividend income reinvested, of 7.2%* over the past three decades.
Based on the same growth rate, and without allowing for inflation, putting £5 aside every day from the day a child is born until they reach the age of 10, could result in a pension pot worth £1 million by the time they hit 65.**”
Who wouldn’t want to give their child a million pounds whilst not having to contribute anywhere near that amount?! I know I would. Yes, they would have to wait until they were of retirement age, but in my opinion I’m not sure that there’s a greater gift that could be given.
Coming back to looking at you, investing for you and your retirement planning...If you are in a fortunate enough position to have a significant capital sum to invest and have been registered in a UK pension scheme, at some point in your life. Then you are eligible to utilise the ‘carry forward’ option. The normal maximum allowed in any one tax year to be contributed to a pension scheme is £40,000 or 100% of your UK Relevant Earnings, if lower. If you haven’t taken advantage of this for the previous three tax years then you are able to add this to your current tax years contribution allowance. If this is you, take advice. Us financial advisers are able to work out the amount of ‘carry forward’ that is available to you and we would always look to start with the oldest year first, to ensure that you don’t lose out in the future years. If you were to invest your full annual allowance of £40,000 this would effectively cost you £32,000 but could be less depending on your individual circumstances! *you are able to contribute to a pension on a monthly basis as well as a lump sum. Lots of my clients look at what they consider to be an affordable monthly amount. If you are self employed then the money paid into a pension, you pay 0% income tax on. Limited Company Directors, the funds contributed to your pension are exempt from corporation tax and for an employed person we would claim back tax relief that has already been paid from earnings. At the end of your financial accounting period, this can often equate to saving you thousands whilst also planning for your future.
We’ve talked a lot here about the tax relief benefits of a pension, which in fact are incredible alone. When you have a pension investment there are choices in terms of different types of funds and portfolios that you are able to invest in. This is where you need to explore your options and take advice. Make sure that the firm you are taking advice from, works well for you. I would say self selection of funds is a lot more complicated but of course, available should that be your preferred choice. Financial advice doesn’t need to cost the earth and there are some advisers out there that are able to offer you an initial, no obligation conversation, depending on the firm that you choose to work along-side and your attitude to investment risk. I would say that a lot of the portfolios out there will target between 5-7% per annum on returns. That’s keeping it conservative. With an investment into stocks and shares, there is risk involved and in return for your risk, over the medium-long term you should see a positive investment performance/reward. This is a much more appropriate investment to have over a 10+ year period. It’s important to understand that there’s always a Brexit or a Covid or a something, so not every year will be positive but the chances are that over the longer term, the positive years should outweigh the negatives...
I hope I’ve still got you hanging on in here, I know pensions aren’t the most exciting discussion point but they’re pretty important, actually financial planning overall is. There are so so many different investment types that allow you to save for your retirement and today I am touching on those that, in my opinion, are probably the two most effective and most common.
The second is investing in property. If you look over the years, property prices are almost guaranteed to create capital growth. There isn’t a period in which we know how long this will definitely take, but if you are financially able to ride out a fall in house prices then over a longer term, you will build up equity! Although a property is a great investment, whether this be residential or rented out. You do need to keep in mind the tax implications of having a rental property. Although on face value a rental property can provide great monthly returns and long term capital growth, you also have the take into account the different taxation rules that will apply. I won’t go into too much detail here as this is more of an individual based scenario and each will be different. But if you are looking to purchase a rental property, I recommend that you take advice from both, a financial adviser and an accountant who is able to give tax advice. During the period that you are renting out the property, the income will need to be declared to the revenue, creating an income tax charge. If you are already earning an alternative income, this can sometimes push you into the next income tax bracket, making the income received, less desirable. You also have to consider over time, that the equity that you gain in the property value on disposal, will be liable to capital gains tax. Not to mention the additional 3% surcharge that would be due on the Stamp Duty Land Tax on purchase.
One of my top tips here, why not have both? If you are lucky enough to have a rental property and don’t need the monthly rent to support your income. Why not divert some of your employed/self-employed earnings into a pension (removing the tax charged on this element of income) and replace it with the rent received. Essentially, you could class this as investing the property income. Although to do so there is a ruling that you have to have alternative earned income to be able to benefit from this. Therefore effectively not creating an additional income tax liability, than that you are already paying.
I think for today I will leave that one there. Retirement planning is very complex and also relative in different ways to different people on a case by case basis. I’m always happy to help to answer any questions, should you have some, either drop me a note in the comments below or pop me a DM.
Thanks for checking in again,
*Past performance is not indicative of future performance.
**This figure is an example only and is not guaranteed - they are not minimum or maximum amounts. What you will get back depends on how your investment grows and on the tax treatment of the investment. You could get back more or less than this.
Schroders Global Investor Study 2017
And no, I’m not talking about how you’ve all made or practised making your babies...So! Some of you will have children, some of us will have ‘step-children’ and some will or won’t have mortgages. The list goes on for the responsibilities that we do or don’t have including those who rent homes.
The fact of the matter is that we all insure our cars, the majority of us insure our homes and only some of us insure our lives and incomes. Do we genuinely value our cars more than we value our own lives? Or is our perception of this that it is generally ‘too expensive’ before even checking out the finer details?
The difficulty is, that there are so many different types of life protection and most of which get generalised as ‘life insurance’. In real terms, life cover, ensures that a lump sum is paid out in the event that you pass away. Generally the funds from this payout would be used to repay an outstanding mortgage balance, to support an ex-spouse where maintenance payments are due to be made or an additional sum that can be left to partner/spouse or children.
Life cover (subject to underwriting) is generally the cheapest form of life protection that is available to us. Even when adapting it to lump sums or regular incomes. Other types of cover include things such as critical illness and income covers which are essentially a sick pay replacement type policy. There are so many varying options on these policies, the cost can be tailored to your specific circumstances and mostly, to your preferred budget.
What I will say is that if YOU are unable to carry our your current job or your general daily activities, is your life able to resume as normal? Often the answer here is no.
Now, don’t get me wrong I am a realist and I really understand that the majority of people that I meet, don’t want to be spending hundreds of pounds on insurances per month. But I am a true believer in that you should get the opportunity to understand what the different types of covers are, that are available to you and the cost options too. I’ve mentioned in my previous blogs, take advice. Let it be a decision that you make and understand rather than brushing over it because of a potential predetermined misconception that you/we have.
Best case scenario, you have a policy and never have to claim. Worst case scenario, you have an unfortunate scenario where you have to claim. BUT you have total peace of mind that your family is totally protected and you have financial options.
Isn’t it such a morbid conversation topic? I know we mostly avoid these types of conversations because they’re a little awkward, but imagine, worst case, your family is fully looked after for a reasonable cost and that it is one less stress or subconscious worry off your mind. The energy that we save in these worries can be directed elsewhere and who knows what we can achieve with that.
I would love to hear your thoughts and opinions here?
At the beginning of lock-down, besides the anxieties, I set myself a structure. I was exercising three or four times a week and then walking every evening. My body and mind felt good. For some reason since mid July, I’m even struggling to even get out for a walk. This new life has finally taken it’s toll on me, does anybody else feel the same?
I’m not sure why, but the only thing I can think about at the moment is around the uncertainties that are upon us; will we end up in a local lock-down? When can I book my next holiday without the worry of potentially having to isolate? The feeling of not being in control of things, isn’t my fave if I’m honest! I’ve been having the most anxiety for the past 6 weeks in the form of chest pains which I have never experienced before, totally weird but I guess sometimes, a way of our bodies talking to us! Not for a pity party but I know it’s mainly due to the current situation we are all facing and the fact that I sadly lost my granddad through a series of unfortunate events. A very sad time for me and my family, even more so with the current restrictions.
As I’ve mentioned in previous blogs, being self-employed definitely has its benefits but equally has it’s disadvantages. I can probably relate this to some of you, who will be in a heavily commission based roles. Time out is time (when you are the money driver), not making money. So, do we deserve to have a break too? YES, of course we do! If we were in an employed role getting a regular salary, we wouldn’t think twice about taking our annual leave. Today I realised that I have actually only had a few days off since Christmas. No wonder my brain is frazzled and I seriously can’t be arsed with life...
Today was the day that I took action and next week we have decided to pop away for a couple of days just to switch off and getaway, UK of course! Besides that, I have decided that I am going to have the WHOLE week off. I feel like a mad woman but my business and life will totally feel the benefit and appreciate the re-connection, post break...I hope, ha...
It’s so easy to become consumed with all these amazing people, who to be quite frank, look like they totally have their shit together and start comparing myself to them. They have rubbish times too. I’ve gained some weight this past month, purely because I haven’t exercised, I know that. So today is the day that I pick up my ‘feel sorry for myself’ bag and man up! (Or woman up) to keep it PC and all that.
On a positive note, I’ve created myself a new shiny spreadsheet to track all my in-comings, outgoings, tax bill savings and so on and for once, I actually feel like a have a full handle on my finances. It feels AMAZING.
“Control the things you can, and learn to ride the things you can’t”. It’s a learning curve but I’m definitely on it!
Anyway, thank you for checking in and I hope that you find comfort in knowing that we all have life going on. Nothing is perfect 100% of the time but at the moment I’m just celebrating my little wins, until life resumes to as normal as it possibly can do and Covid allows me to get back to the bits that I love most about my job. The way I have to do my work for now is far from ideal, so I haven’t been enjoying it as much. But this isn’t forever, I just have to be patient and accept it will take some time.
‘See’ you soon,
I remember when I was trying to buy my first house, people were so inquisitive about whether I was sure I wanted to, and most of all if I knew how difficult it would be. At the time I was actually a mortgage adviser so I had quite a good idea of the process and the options that would be available to me. I was lucky to be in that position at such a young age. One Friday afternoon I decided to run a decision in principle (credit and affordability check) to see what I could borrow, which in turn, would enable me to set a goal to save and reserve a new shiny house. I used the help to buy scheme, which I still think is a great option now. It has helped so many people get onto the property ladder for so much less, in terms of upfront cash and interest rates.
As a general rule of thumb, a mortgage lender will let you borrow 4.5 times your annual earnings. This is of course subject to affordability, credit scoring and underwriting assessments, but this gives you an outlined generalised idea...depending on your circumstances there are sometimes lenders that would even be able to look at your earnings more favourably. You should always take full advice here because sometimes borrowing so much, isn’t appropriate for everybody. There are so many online calculators around, why not have a play around and see what they say for you?
So, how can we be more effective to efficiently save more pounds to help ourselves get onto the property ladder?
I know when I was saving for my first house it was so easy to dip in and out of the ‘pot’ but once I finally got there it was the best feeling in the world. Independence and somewhere, where I made all of the decisions and everything I had was mine.
No way am I saying it’s an easy road, but it’s a well worth it journey and hopefully I can offer you some great tips here...
I actually found that when the pounds started to build up that it was so much easier to save and stop spending on unnecessary things. I guess it became a bit of a game and the bigger the number got, and the closer I could see myself to reaching that goal it didn’t feel like a sacrifice anymore but rather, an achievement.
Just remember that everybody does everything at their own pace and to not believe everything that we see in this such social media based world. Set your goal within your own achievable limits because let’s be honest, becoming a home owner at any age is a massive achievement. I used to get sucked into other people’s idyllic worlds, but just remember that we all have different paths and I’m a true believer that, as cheesy as it sounds, we end up where we desire to be.
I would love to hear how you get on and I’m also happy to answer any questions should you need any further clarification on the points above...
Thanks for checking in, bye for now.
I don’t know about you but this lock-down period has knocked me out of sorts in so many different ways. Emotionally, physically and not to mention financially.
I think we all went through the initial phase of the different anxiety’s that we were being faced with. The unknown’s of what lock-down was going to bring to our lives and our loved ones, not being able to see our families whilst also making the adjustment to our finances as some of you may have been furloughed or told to stop working completely. Something that nobody has ever experienced. There were a big chunk of people who ended up in the government help ‘gap’ with access to NO support, this was because of the amount of time an individual had been self employed or the fact that you’re a director of your own company. All complications that we have all had to deal with and in our own ways, have probably grown and overcome. These things that hopefully our future generations will never have to.
Me, myself actually fell within the ‘gap’ meaning that even though I was unable to go out and see clients, seek out new clients through the form of networking and such events meant that I was entering a really unknown period. Could I pay myself this month, next month, or at the end of the year if this is still having a knock on effect? My anxieties were high and so I chose to redirect my anxieties into developing myself, my lifestyle and my finances....
Have you taken this time to re-evaluate your spending habits? I know I have. Have you done a basic income and expenditure exercise to see the bare minimum income that you can live on and cut out all of the expenses that aren’t needed. I have taken this time to get financially healthy. Don’t get me wrong I love a good spreadsheet as much as the next Financial Adviser but it doesn’t have to be fancy. I cut out what I didn’t need and created a financial plan moving forwards. Not all of this is materialistic, however I have set some money aside for those new Jimmy’s and a Louis handbag. Life’s too short, treat yourself.
I am happy to share my very basic income and expenditure assessment spreadsheet should you want to check that you haven’t missed a trick, just drop me a DM with your email address or simply fill out the contact form in the page header.
Quick WIN money saving tips:
I would also love to hear about all things Finance that you would like to hear about, from me. My content will be factual rather than advice based and over the course of the next few months I will be covering off different topics that will include some of the following; How to save and top tips for getting onto the property ladder, How can I repay my credit cards more quickly, Can I justify that new bag when saving for a house?
I think that it’s really important for people to have access to free, good quality advice and I am hoping to create a platform that will help to support you all into your financial futures.
Thanks for checking in and bye for now,