As always, I am here to help ensure that the last phrase above stays with you for life, by helping you manage your assets using highly tax efficient, well-invested methods, and offering you sound advice as the years go by.
Getting financially fit
By Chris Burke
This article is published on: 11th September 2024
This month I thought I would really get you thinking and organised by providing, from my experience and professional opinion, in the order of importance, a list to get you financially efficient and enable you to change your wealth and financial outcome in life. Pick out those areas that apply to you and get working on that personal financial health-check now, so that over the years you maximise your assets and wealth:
1 – Taxes
Review your tax situation, making sure all your assets are as tax efficient as possible and that any monies you have are not subject to unnecessary tax, both now and later in life. For me, this is the FIRST task to tackle with your finances, and working with a good tax adviser here in Spain is rule number one. Having a ‘leaky bucket’ where any gains you make are ‘dripping’ away to hacienda is not managing your money effectively.
2 – Debt – Review and Reduce
Pay off high-interest debt as quickly as possible, starting with credit cards and other loans with high rates. Consider refinancing options if rates drop or consolidating debts for lower rates.
3 – Prioritise Building an Emergency Fund
Aim to have at least 3 to 6 months of living expenses in a high-yield (good luck with that in euros!) savings account. With economic uncertainty, having a buffer can provide peace of mind and protect against unexpected expenses.
4 – Have short, medium and long-Term financial plans
Set clear, realistic financial goals (short, medium and long-term) to develop a comprehensive plan and achieve them. Regularly review and adjust your plan to adapt to life changes and financial circumstances.
5 – Consider Inflation
With inflation remaining a concern, explore investment options that can hedge/work against inflation, such as inflation-linked government bonds, commodities, real estate or well-designed investment portfolios.
6 – Invest your savings/spare cash consistently
To grow and increase wealth, one must invest. Nothing is guaranteed in life, however over the long term a good investment plan will work to grow your monies as opposed to a guaranteed reduction in real value with low/non-interest-bearing bank accounts.
Continue investing regularly, regardless of market fluctuations, through strategies like pound/euro cost averaging. Diversify your portfolio across different asset classes (stocks, bonds, real estate, etc.) to minimise risk.
7 – Automate your savings and investments
Set up automatic transfers to savings and investment accounts. This helps ensure you save regularly and take advantage of compounding growth without needing to remember each month.
8 – Re-evaluate insurance coverage
Review your insurance policies, including health, home, auto, and life insurance, to ensure you have adequate cover without overpaying. Consider policies like umbrella insurance if your assets have grown significantly.
9 – Maximise retirement contributions
Contribute as much as possible to a retirement plan, especially if your employer offers a matching contribution. With inflation and increasing life expectancy, building a larger nest egg is crucial.
10 – Stay informed about tax changes
Keep up with any new tax laws or changes that could affect your personal finances. Look into opportunities for tax deductions or credits, like contributing to tax relief investments or making charitable donations.
11 – Rebalance your investment/asset portfolio regularly
Review your investment portfolio at least annually to ensure it aligns with your risk tolerance, financial goals, and market conditions. Rebalancing can help maintain the desired asset allocation and also changes in your life as the years go by.
12 – Plan for major expenses in advance
If you anticipate major expenses (like buying a home, car, or funding education), start planning and saving early. This can help you avoid high-interest debt or dipping into long-term savings.
13 – leverage technology and financial tools
Use budgeting apps and financial management software to help track expenses, plan investments, and manage your portfolio efficiently.
14 – Invest in yourself
Allocate time and resources to enhance your skills and knowledge in personal finances, as this can lead to higher income potential or career advancement.
Nothing changes if nothing changes……
If you would like to discuss any of the above topics in more detail, or you would like to have an initial consultation with Chris to explore your personal situation, you can do so here.
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If you would like any more information regarding any of the above, or to talk through your situation initially and receive expert, factual based advice, don’t hesitate to get in touch with Chris.