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In the lead-up to the end of 2024, it’s the perfect time to take a step back and assess your financial situation with a financial health check. It’s easy to get caught up in the day-to-day, but regularly reviewing your finances ensures you are on track for your goals and prepared for whatever the future may bring. A financial health check helps you gain control over your finances and gives you peace of mind, knowing that you’re making informed decisions.

Why a Financial Health Check is Essential

Starting the new year with a clear understanding of where you stand financially can be transformative. Here are the reasons why it’s crucial to carry out a financial health check:

Clarity on Financial Priorities: A health check allows you to see exactly where you stand in terms of savings, debts, and investments. This clarity will help you set and realign financial goals.

Long-Term Planning: Whether you're saving for a big purchase, retirement, or just working to get out of debt, regularly reviewing your financial position ensures that you're building a solid foundation for the future.

Preparation for Life's Uncertainties as no one knows what lies ahead: A health check helps you prepare for unexpected situations, be it a job change, family emergencies, or economic downturns, by making sure you have adequate insurance and savings.

Key Areas to Focus On

  • Budgeting and ExpensesChevron-down

    Start by tracking your income and expenditure. Are you spending within your means, or do you need to tighten your belt? Using tools like budgeting apps or spreadsheets can help give you visibility into where your money is going. Keeping track of your spending will allow you to make adjustments and start saving more effectively for 2025.

  • Savings and Emergency FundsChevron-down

    An emergency fund is your financial safety net. Aim to have at least 3-6 months of living expenses saved in an easily accessible account. If you don’t already have an emergency fund, now is the time to start building one. For savings, ensure you’re also putting money aside for long-term goals like retirement, or short-term goals like a home improvement project.

  • Investments and Retirement PlanningChevron-down

    Review your pension plans and any other investments to see if you’re on track to meet your retirement goals. Consider how much you're contributing to your pension and whether you could benefit from increasing those contributions. If you have additional investments, check their performance, and see if they align with your financial objectives.

  • Debt ManagementChevron-down

    If you have outstanding debts, it’s important to assess whether your current debt management strategy is working for you. Are you paying off high-interest debt first? Would debt consolidation be a useful strategy? Reviewing your debts now, especially as you prepare for 2025, will help ensure you can reduce or eliminate debt in the coming years.

  • Insurance CoverageChevron-down

    Insurance can be the difference between financial stability and hardship when unexpected life events occur. Review your life, critical illness, and income protection insurance to ensure it provides adequate coverage. Health issues, job loss, or family emergencies can happen at any time, and having the right coverage in place will protect you and your loved ones.

How to Get Started

If you haven’t already, start by reviewing the following areas in detail:

Track Your Spending: Use a budgeting tool like MoneyHelper to track your income and expenses.

Consult a Financial Advisor: If you’re unsure about where to start or how to plan for the future, consider speaking with a financial advisor. The Financial Conduct Authority (FCA) offers resources to help you find a regulated professional.

Review Your Debts and Insurance: Evaluate whether your current debt management strategy and insurance coverage are sufficient. Websites like MoneyHelper can help guide you through managing your debt and understanding insurance options.

Review Your Retirement Plans: Use government sites like Gov.uk or MoneyHelper to review your pension plans and assess if you need to increase your retirement contributions.

Planning for the Future

As you approach 2025, taking control of your financial situation will give you the confidence to face whatever the year may bring. While it’s easy to get caught up in the daily grind, planning ahead is essential for building a secure future for yourself and your loved ones. If you’d like professional guidance, we work closely with a handful of trusted Independent Financial Advisors (IFAs) who can help you with your long-term financial planning.

Book a mortgage consultation on: Book a Consultation
Call us on: 03301 759 977
Email us on: financialservices@rettie.co.uk

Rettie Financial Services Ltd is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.

Rettie Financial Services Ltd. Registered Office Address: Deuchrie, Dunbar, East Lothian, United Kingdom, EH42 1TG. Registered in Scotland Number: SC711925.

For insurance business we offer products from a choice of insurers.

Your home may be repossessed if you do not keep up repayments on your mortgage.

You may have to pay an early repayment charge to your existing lender if you remortgage.

There is no guarantee that it will be possible to arrange continuous letting of your property, nor that rental income will be sufficient to meet the cost of your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.

The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

Author
Bob Duncan Cert CII (MP)
Managing Director
Edinburgh Financial Services
Published: 9 Dec 2024
Financial Services
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