What a Difference a Year Makes!

Twelve months ago we were suffering dry January, joining gyms, lamenting the increasing numbers on the scales, buying up self-help books and making New Year’s resolutions in the hope that this year might just be different – we might just stick to them!

We are halfway through January 2021, and this year it does feel different, don’t you agree? Last year we didn’t have our fill of luxury holidays, our wardrobes are looking very “last year” (because is there really any point in worrying about fashion?), you can’t remember the last night you had a night out, and restaurants? What are they? This year social media posts asking about new year’s resolutions are met with comments of “Haven’t we been through enough!”, “a dry Jan is NOT conducive to home schooling”, and “I am just wanting to survive”. I can see their point! It seems bizarre to make resolutions out of habit.

This global pandemic has changed us, or at least some of us, and hopefully for the better. In the same way that we are re-prioritising our goals, we are re-thinking what is really important. We are starting to get used to a pared back lifestyle because we just haven’t had the opportunity to consume in quite the same way. How does that make you feel? A friend of mine, whose business has been badly affected by the pandemic, admitted that early on she undertook a budgeting exercise so she could cut out the unnecessary expenditure. Afterwards she said she felt purged, that it had suddenly hit her just how obscene some of her spending was – on frivolities that just don’t really matter, not in this new world.

As a Financial Planner I am asking my clients to take this new perspective and apply it not only to their budgeting and their everyday lives, but also to their longer-term financial plans. It is a great time to evaluate your goals: are they still as important to you? Ask yourself why and if you cannot come up with a good justification then perhaps think again.

Many people jump on the New Year resolution bandwagon, but goals must have a purpose, or they will be incredibly difficult to achieve. A purely financial goal of “I want this investment to grow to £x by y date” may not be impossible (as long as it is realistic) but is pointless if it has no purpose. How about living a life where each penny spent, and each pound saved or invested has a purpose in enriching your life?

A plan to retire at a certain age should also be considered and analysed. Not that there is a right age to retire, but in choosing this age are you just adhering to a social norm or do you have a bigger plan? Do you have visions of travelling or taking up a new hobby? Many people still have the energy for a part time role in their sixties and seventies, be it voluntary or paid. I even have a client who is setting up a new business in her sixties. It’s time to review the bucket list.

Life is not a dress rehearsal and this pandemic is certainly a crude reminder of this fact. Do we not owe it to all those who have not or will not survive this crisis, to make our lives really count? To live with as much purpose as possible, for the moment, and without reproach or regret?

It is not for you to ask your financial planner “What can you do with my money?”, but your planner should be asking you “What do you wish your money to do for you?”.