We are all hoping that this Christmas will not be cancelled, but however big the celebration is this time around, one thing that all Christmas’s have in common is that they are often followed by a period of reflection. The lull between Xmas and New Year is a time when big decisions are often made – holiday plans, New Year resolutions, divorces, changes in jobs, and lots of financial planning queries!
So to avoid anything too rash, here’s a couple of top tips on things you could mull over.
1. A time of giving – Do you know how much you give to charity?
Particularly over the last year, many of us have given more to charity but our donations are often spontaneous and ad hoc. But if you don’t keep a good record, the charity could be missing out. Whilst they get the basic rate of tax relief directly through Gift Aid, if you don’t claim the top up to higher rates through your tax return, then the money is going to waste. The charity can get more for your same net donation.
If you give regularly and more significant amounts, then it may be worth setting up a more structured approach to your giving to help with the administration around claiming relief and maximise the benefit to your chosen causes.
2. What if?
If the last 18 months have taught us anything, it is to be prepared for the unexpected. Without being the Xmas humbug, it’s worth spending a bit of time thinking, ‘what if?’.
If you are employed, what would happen if you lost your job or were unable to work. If you are a freelancer, self-employed, or a sole company director, what are your protections if you can no longer provide your services? We saw how certain sectors missed out on the Government protection schemes. What would happen if your partner or another family member had a similar situation?
Spend a couple of hours digging through your paperwork and checking that you know your situation. Start that discussion with your family. If you are unsure, contact us!
3. Talk money
And when the conversation is running dry, why not risk being the real party pooper and talk money! It’s never too early to start to plan for your long-term future. Every financial planner will bore you with the benefits of long-term compounding or what Einstein called the 8th wonder of the world. Perhaps more of that for another time. But as a nation, many of us are not saving enough to secure our long-term futures – the more we talk about it, the more people will act.
Encouraging one young person to start putting a bit aside each month into a low-cost, long-term investment will be the best Xmas present you could give.
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