Updating your spending plan

Trimming the fat

We won’t highlight the scary numbers around the cost of living crisis we now find ourselves in, but we will do our best to ensure that you feel prepared.

In many ways our clients are not as impacted by this as many folk in our wider communities – we don’t have any clients earning minimum wage for example. But we do have clients who are in their retirement and for whom small changes can have repercussions over the longer term. We also have a number of clients who fall into the ‘middle-earners’ bracket (recently identified in the press as a group who will feel the pinch).

This particular group of people are generally logical who therefore know that the answer probably lies in being sensible about budgeting; and cutting costs where it is possible to do so.

There is a lot of ’bumpf’ in social media currently about millennials who are tired of the advice from older generations to cancel their Spotify account and stop buying their skinny lattes at Starbucks in order to save money. This advice given in the context of trying to save up for a deposit on a house is frankly inadequate and I do understand the millennials’ argument about that.

However if we apply the same sort of methodology to the current crisis of ‘my living costs are increasing by £150pm’ – then there is actually some common sense to this approach – take a look …

Spotify £9.99pm

Netflix £10.99pm

Starbucks £40pm (assumes halving a one-coffee-per-workday habit)

Wine £20 (buy two bottles less per month)

Takeaway or meal out £40 (reduce by one per month – amount depends on size of household)

Amazon Prime £7.99

These alone total £128.97

We’re not talking about huge lifestyle-changing cuts here – we’re talking about small changes that soon add up. Shopping around for cheaper options on your existing expenditure is another way to cut costs (sometimes significantly) – mortgage, insurances, TV & broadband package, mobile phone contract.

UPDATING YOUR SPENDING PLAN

Martin Lewis (Money Saving Expert) comes up with new suggestions all the time – frankly I find the layout of his website ‘messy’ but I do rather like his weekly newsletter which is always full of good ideas.

It probably goes without saying but ‘now’ would be a very good time to review and update your spending plan – you can only consider how to cut costs if you know where the biggest savings are to be had – we know this can be a painful exercise so we offer a few ways for you to do this – you can click here for our video and for a pdf or an excel version of our income and expenditure form; OR you can send us (securely via the portal please) the last three months of your bank statements and we’ll do the legwork for you; OR we can work from your own ‘budget’ document – whatever form that takes.

However anxious you may be about impending price rises, there are options; there are changes you can make. If you are ever feeling overwhelmed about all this though, please do get in touch. We will support you however we can.

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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A Fresh Start for 2017

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A Fresh Start for 2017

A new year, a new page, a fresh start for 2017. It hasn’t escaped my own attention that I have not been posting much since late November. This probably had something to do with my incredulity that America has elected Donald Trump and then the pressing tasks in December. However, I have now adjusted to the new reality of underqualified reality TV stars in powerful positions and feel the impetus of a fresh new year.

So here we are in 2017. All good financial planning will look forwards, but great financial planning also looks backwards to attempt to learn from the lessons being taught, and hopefully not too many of them are lessons that we had already learned but forgot.

Those New Year Resolutions

Many of us make new year resolutions. We’ve had just over a week of the new year, so how are you doing? One of the lessons I have learned is not to make new year resolutions, for me it’s the fastest way to feel utterly feeble. What is important however is progress towards goals, based on your own values. Naturally this is different for all of us and a date in the diary is not exactly a helpful “starting gun” but it does at least remind us to start, or keep going.

Last week as a client, you would have received an email about your Spending Plan. This is probably the thing that I and other advisers struggle to get returned by clients the most. Perhaps because it involves a reasonable amount of effort, perhaps because there is a sense of self-accounting in which we learn that we’ve overspent or not kept to our plans. Yet is it arguably the most important element of financial planning. Knowing where you are today, what your lifestyle costs and where your money goes. As it is said, the best indicator of future behaviour is past behaviour…

Whilst dreams, goals and plans can be helpful, without taking any action, they are pretty much worthless. My desire to shed some weight is not sufficient to make it happen. A desire to have enough income to protect and maintain your lifestyle into the future is not sufficient to make it happen. There’s some effort required. As your financial planner, part of my role is also a bit like a coach… one to encourage, occasionally nag, but to remind you of what you promised yourself.

So please, take the time to reflect and complete your Spending Plan. It doesn’t need to take long and its doesn’t need to be to the nearest penny, but it does need to accurately reflect where you are now. If you haven’t had the email, check your spam email (and change your settings for our emails) or get in touch to request one.

Wishing you a great 2017.

Dominic Thomas
Solomons IFA