In a time where uncertainty is rising, it is important to understand the circle of influence you have. Most people are not able to affect interest rates or the level of inflation; however, we can all control our own finances to ensure we feel good about the decisions we make and that they are from an informed position.
Budget
One thing you can always control is your budget. Holding enough liquidity for times of emergency, approximately six months’ worth of expenditure, will help ensure your budget and your plans remain on track in times of difficulty. Attempt to get a handle on your discretionary spending, especially in the run up to Christmas. It is special time for families, especially those who missed out on Christmas last year, so there is often the tendency to spend more or overcompensate with expensive gifts. In my opinion, gifting is only enjoyable if it is affordable. Setting a budget for gifting throughout the year and sticking to it means you will have set aside what’s required to make Christmas enjoyable. Ideas that allow you to stick to your budget could be as straight forward as creating a Secret Santa where each person buys one gift, which can be thoughtful, fun, and cost effective.
Is My Level of Investment Risk Appropriate?
Are you taking the appropriate amount of risk for your personality type? For example, if investments keep you up at night in troubled times, you should question whether investments are doing you more harm than good. Equally, if you feel as if you are financially stable and should be making bolder investment choices and that is causing fear of missing out on investment growth then changes should be considered. Making the correct decision about your investment risk should reduce stress and anxiety. There are risk profiler questionnaires available online that will allow you to work out whether the risk you are taking with your investments is appropriate for you. Once you have taken such a test, you can then make the necessary adjustments to your investment. If you are unsure what to do, then seek financial advice before making any changes.
What Am I Investing In?
With COP26 in the headlines daily, we are constantly being made aware of our carbon footprint and the part we play in creating a more sustainable future for the planet. One of the ways to do this is to choose investments that focus on companies that make positive adjustments to their business to be more ethically focussed and sustainable. Again, if you are unsure on what you are invested in currently, or what the alternative choices could be, speak with a financial adviser who will be able to discuss the nuances of ethical investing.
Get a Second Opinion
If you have questions regarding socioeconomic issues and the effect it could have on you and your circumstances, it is prudent to seek a second opinion. Getting verification from a professional in the area concerned can shift your perspective from what cannot be controlled, to what can be controlled. Whilst we are being bombarded with negative news from multiple sources, an objective point of view can help you focus on actionable steps to make changes in your circumstances. Reports of potential interest rate rises, record inflation, investment market volatility and general media sensationalism, can cause any story to be viewed negatively; however, you can respond in a constructive way, by trying to understand if there is anything you can do to positively affect the outcome.
If you are wondering whether there is something you can do to make positive changes for yourself and/others, please get in touch with a dedicated adviser at Wingate Financial Planning to see if we can help.
