Here, Chartered Financial Planner Cleona Lira shares her five New Year’s resolutions to help inspire you towards financial confidence in 2023.
1. Recognise time as a precious asset
We all have a list of spending priorities and a limited amount of time to earn money. One of my favourite books is Your Money Or Your Life by Vicki Robin and Joe Dominguez, which offers the perspective that money is life energy.
In the book, Robin writes: “Any waste of your life energy means more hours lost to the rat race, making a dying. Frugality is the user-friendly and earth-friendly lifestyle.”
With this in mind, I intend to take a look at my spending by updating a spreadsheet on my computer. I really do not enjoy doing this, so I have to figure out a way to make it fun and engaging. A nice chai might do the trick. I aim to ensure that I’m spending enough on what is meaningful and joyful to me; I would rather not eat beans everyday, walk to work and skimp on little pleasures.
I do, however, want to cut out any spending that’s not meaningful, necessary, or fulfilling. For example, magazine subscriptions that I don’t really use. I don’t want to be squandering my precious life energy by mindlessly buying things that I don’t need.
You can work out what an hour of your life energy is worth by using the principles offered in the Your Money Or Your Life book (which should be available to borrow at your local library). When you see that a new pair of shoes that you don’t really need is going to cost you ten hours of your life energy, it may help you decide on whether to buy them more easily.
It’s true that you don’t see what you don’t measure. That’s why I’ve marked this task in my calendar. If it’s scheduled, I know I will get it done.
2. Balance ‘being’ and ‘doing’
I really enjoy ‘doing’ things such as client meetings, reading information, responding quickly to client emails, thinking of creating content for my blog, etc. But balancing productivity and presence is the key to staying energised. Since I am better at the doing, I have drawn a list to remind me about the being.
Some activities I plan to do to support this include:
- Time with friends
- Walks in nature
3. Personal finance expert on my life
As a financial adviser, it can be easy to prioritise my clients’ needs and put my own finance goals on the back burner. So I use a simple checklist of financial planning tasks, which includes:
- Check asset allocation and fees payable on investments and pensions. (Moreover, remember to check work pensions).
- Login to investment/pension accounts to eyeball values once every three months.
- Automate my investments. Increase direct debits to ensure a healthy savings rate. Use tax allowances like ISA and pensions annual allowance, where possible.
- Check life insurance plans are adequate and in trust.
- Update my will (I haven’t fallen out with anyone this Christmas, so might skip this).
- Double-check mortgage rates; check dates for when to shop around for a new one.
And here’s some very useful advice from the author of a great book, Your Money and Your Brain.
“So, instead of driving yourself crazy by constantly monitoring your stocks or funds, you should cut back gradually until you look at their value only four times a year – either the end of each calendar quarter or on four easily memorable and roughly equidistant dates.” – Jason Zweig
4. Financial growth mindset
If you find any area of your personal finances a struggle, make a plan to close your knowledge gap. It could be understanding how pensions are taxed, or you might be getting close to retirement age and need to understand what ‘drawdown’ means. It could even be as simple as reading an investment fund factsheet.
For me, I am keen to learn more about clean energy and to read books by scientists about climate change. I also regularly listen to podcasts on topics I want to know more about and save interesting videos to my ‘Watch Later’ playlist.
Remember to pat yourself on the back for having got this far. For some of us, there is an aversion to learning about money, so celebrate any wins to encourage yourself. It can take just two weeks of focused effort to feel well established in financial literacy so it’s well worth the effort!
5. Talk about money
I love talking about money; this one is easy. I just want to do more of it. And would encourage you to do the same.
So often I see missed opportunities for honest, authentic money conversations. I would encourage you to start with your own social circle. With money decisions so intimately connected to global warming, it’s worth talking about where you bank, how you invest your pensions, who your energy provider is, your investing philosophy and so much more.
If you don’t feel comfortable talking about this with friends and family, maybe try attending a workshop or a community space.
Have a great year getting money confident!