New year’s resolutions face many challenges. Many are just box ticking dreams.
Those that work are built on a real ‘why’ – a solid reason, that when you come to the courageous crossroads of a decision, drives you straight in the right direction rather than procrastination or defeat.
So start with learning from the past. Why didn’t other resolutions work and why did some actually succeed.
Potential New Years money resolutions for 2021?
2020 was traumatic in very many senses. As they say, if you are going through hell, keep going, do not hang around. Much has been learned from the horrific experience and none more so than ‘what do I actually need and value’.
Whilst many of the columns during the year are about making your money grow and achieving the best returns, my starting point with money is how not to waste it in the first place.
There is no point turning your heating up on a cold day if you have your windows open.
And that’s really where I would start with 2021’s new years resolutions.
Around me are photos of my Grandparents, Dad and Mum, all since passed. Not one memory I have of them is to do with wealth, presents or money. Not one.
Every one relates to memories, relationships, moments, time, smiles, laughter, and 2020 has deprived us of making those memories with many people we can’t be next to. Attending to that with ‘emotional agility’, as Susan David talks about in her book, shows us what we truly value.
Maybe we should focus on what we really need and value, most of which is free?
Is there any point telling ‘followers’ on social media about the new car purchase when they are either just jealous, know it has been bought on a monthly payment scheme, and in any event, they are clicking ‘like’, just so you click their like for their heavily indebted car.
The dopamine rush created in the first few days of most purchases, rarely copes with the ensuing months of buyer’s remorse and cost.
Spending as an investment
Think of purchases, not as a cost, but as an investment/wastage of time that matters to you. For example, a new iPhone costs the average UK earner 61 hours of work allowing for tax.
Therefore, when we go back to the above values, if I had 61 hours to throw biscuits to the dogs, run, talk nonsense to my mates watching a match, or just talk nonsense with mates generally, I know which I would prefer.
It’s a great way to look at perspective.
Check costs and wastage on your investments and pensions. I’ve written about these during the year. For example the best performing pension turned £100k into over £1million from the year 2000, where as the worst translated to just £95k. One provided an income of over £400 per week, the other, just £36 per week.
Both of these were available to us all, yet many ‘take out a pension’ and throw in the back of the cupboard with an old unfashionable jacket attracting moths. Take it out and refresh it.
More wastage: If you have any insurances, run them all past an Independent Financial Adviser. I’ll look at them if you don’t have one, but do it no matter what.
Insurances – it pays to show around
The difference in cost on our life insurance quote systems between number one and number six was 33%. That is better in your pocket than in the insurance companies’. Or, pay the same premium and take the extra 33% cover. On a £300,000 life policy to protect your family or mortgage, that would equate to roughly £100,000 for your surviving family versus the insurance provider.
In simple terms, dig out your plans and have them reviewed.
Often Independent Financial Advisers will receive a commission for the life cover, so the advice can be paid for with that so as not to make it too onerous and stop you approaching them.
It’s been a crazy year to try to guide you. I hope the columns have been useful.
Take care of yourselves, family and friends and Happy New Year.