The new year is as good a time as any to adopt some new habits that will have a veritable impact on your life. Financial goals are an ideal starting point – not least because they’re often attached to palpable positive outcomes.
Tony Clark, Senior Propositions Manager at St. James’s Place Wealth Management, says:
“Getting into good tax and financial habits will make your life so much easier. The key is to form new habits that make your good intentions stick, to the point that you don’t even know you’re doing them.”
Here are five simple but effective habits to get into before the end of the tax year:
1. Maximise your allowances
We all have allowances at our disposal that help our money go further. These may be ISAs, but there are also other options that fail to get a look in and are therefore left unused.
“Make sure you’re not missing out on the allowances that you can benefit from. Are you using what you’re entitled to, such as carry forward on your annual pensions allowances or gifting for Inheritance Tax?”
Find out what’s available and what you could benefit from – otherwise you risk missing out on a great money-saving opportunity.
2. Get organised
Take control of your money rather than letting it control you – downloading the HMRC app is a good starting point, says Clark:
“There’s loads of information on there that people might not be aware of, so it’s very useful. You can use it to keep track of your records, and stay on top of things such as your tax code, for example.”
3. Act now
The tax year ends on 5 April – and while that might seem some way off, there’s no point in creating stress by leaving everything until the last minute. By acting sooner rather than later, you can benefit from the additional time it can take providers to process transactions at tax-year end.
Regardless of whether you need to top up your ISA, make extra pension contributions or action other changes, it’s worth allocating some time well before April to avoid adding to your to-do list nearer the time.
4. Organise your paperwork
The number of those going self-employed surged during the pandemic, seeing more people in the self-assessment system. The 31 January deadline for online self-assessment returns can sometimes mean a scrambled search for the records and information you need to get your ducks in a row. By keeping your paperwork up to date, life will be much easier when self-assessment time comes around.
“It’s easy to miss the deadline and incur penalties that you might otherwise have avoided. If you’re self-employed, your personal finances will be inextricably linked to your business, so you’ve got more work to do. It’s especially important to be organised and get advice.”
5. Speak to a professional adviser
Probably the best habit to get into and the step that will drive other good financial habits is to speak to an adviser.
“A regular check-in with your adviser will give you the impetus and momentum to keep on top of everything. They will help you with gentle reminders and ask the questions you need to think about.”
Consistency is key when it comes to adopting good habits that will stick. This applies to financial and tax matters too, and once they’re firmly in your routine, they’ll set you up for life. There’s no time like the present!
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.