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PLANNING FOR CHRISTMAS
Mark Salter Certified and Chartered Financial Planner, Fort Financial Planning
Well what a year 2022 has been, a memorable one but not perhaps for the right reasons.
We are currently in a very changing and turbulent environment with the pound hitting all-time lows, energy bills and living costs rising, a new King and another new Prime Minister! As I sit down and write this article the Bank of England has just increased interest rates to 3% when they began the year at just 0.25%.
Almost all of these changes have been outside our control, which has certainly felt unnerving at times.
Despite this, we do know that Christmas is still just around the corner and over the next few weeks we will all be reminded frequently of the number of shopping days until Christmas.
At this stage many of us start thinking about planning for Christmas and we’re certainly going to be thinking more about how much it’s all going to cost. You might begin by writing a list of all the people you need to buy presents for and then thinking about how much you will spend on each person. You’ll also be thinking about what extra food and drink you’ll need and the cost of the big Christmas food shop.
Whilst many people follow this approach, we all know someone that’s been buying presents since January and somebody else that will be leaving everything until the last few delivery days before Christmas.
This got me thinking about the similarities of planning for Christmas and what I do every day as a lifestyle financial planner. Many people might have a plan for Christmas but very few have a plan for the rest of their lives. Even a very basic plan is certainly better than having no plan at all.
A good place to start is creating a budget and thinking about the cost of your lifestyle now and how this might change in the future. What else do I need to pay for such as children’s education, more holidays, new cars etc?
Once you have an idea of the costs, you can then start thinking about how you might pay for it, how much you need to save or how long you will continue working. It is also important for you to know how your income will change in retirement.
You then have a basic plan to work from. You’ll be able to calculate how much you can afford to spend or how much you need to save. Unfortunately, many people live day-to-day and leave it too late.
If you’re a business owner, have you thought about what happens when you want to stop working or perhaps reduce the number of days you work each week? In most cases building an exit strategy from a business needs careful planning and time.
One important consequence of planning, whether it’s for Christmas or for the rest of your life, is that you’ll start feeling more organised, you’ll be less worried and start feeling happy and positive about the future.
A bit like the Christmas shoppers that start planning early – when everyone else is frantically looking for presents and worrying about how they’re going to afford them, they’re at home with a warm mulled wine and all the presents neatly wrapped under the tree, ready to enjoy Christmas.
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