Blue Monday money tips - 10 ways you can care for your cash

With the most depressing day of the year upon us, here's how you can boost your wealth

IT may not be as fun as booking a holiday, or offer the instant gratification of decorating a room in your house - but sorting your personal finances for 2021 will reap far greater dividends.

Long after the tan has faded and three further room transformations down the line, the moves you made to sort your money will still be having a positive impact on your life and future prospects.

While it may be Blue Monday, with 2020 now consigned to the annals of history and a much brighter year ahead, the team at Carlisle-based Rachael Bell Wealth Management today look at 10 ways in which you can have a positive impact on your personal finances this year - and for years to come.

1 - Assess your cash holdings Whilst there can be a great deal of comfort in holding cash, the reality is that due to historically low interest rates, it is not working hard for you. In fact with the rate of inflation significantly higher than the interest rates being offered in most cash ISAs, your money is effectively shrinking at the moment. The advice - explore your investment options; might a stocks and shares ISA, for example, be a better fit for your long term financial goals?

2 - Check your pension There’s so much to consider when it comes to pensions and a good financial planner will be able to take you through the process of ensuring your future is as well-planned as possible.We’d always advise you seek professional advice, but if you want to go it alone, consider contributing more to your existing scheme, checking the value of your state pension and naming beneficiaries for your pension pot should you die.

3 - If you have an ISA make the most of it Since their introduction in 1999, Individual Savings Accounts (ISAs) have provided a simple, tax-efficient solution to invest for the future. The annual ISA allowance of £20k for the 2020/21 tax year remains an important and valuable tax-planning and investment opportunity.Some investors may be anxious about investing a lump sum and fearful that they will get their timing wrong, particularly during periods of market volatility.
However, even professional investors cannot consistently and successfully time the markets, so taking a long-term view is of paramount importance. Consider making the most of this year’s ISA allowance (which refreshes at the beginning of April).

4 - Make the most of your gifting allowance One of the easiest, and potentially rewarding, ways to reduce a future inheritance tax bill is to give some of your wealth away during your lifetime. You can give away up to £3,000 each tax year and not have to pay IHT on it. You can also make use of any unused gifting allowance from the previous tax year. So, a couple could potentially remove £12,000 from their joint estate before 5 April. Remember that last year’s allowance will be lost after that date.

5 - Consider your children’s investments We all want our children to have the best start in life and into young adulthood - and one of the ways in which this can be positively influenced is by managing their savings for them until they reach the age of 18.Take time this year to assess where any cash is held for your children and ask yourself whether those accounts are performing as strongly as possible. One route to consider might be a junior stocks and shares ISA, if your children are of such an age that you can take a minimum five-year view.

6 - Sign up for cashback sites There’s a lot of money to be made from signing up to cashback sites and using them when you go about you every day online shopping. You can very quickly build up a pot of cash which you can put towards a special purchase, a holiday or consider investing. The most popular cashback sites are free to join and your accrued earnings could soon be into three figures.

7 - Save for next Christmas now With Blue Monday (Monday, January 18) fast approaching, many of us will be bracing ourselves for the thud of credit card bills on the doormat followed by sighs of dismay as the true cost of Christmas is revealed in black and white.But it doesn’t have to be like that. Save what you can afford every month in a Christmas savings pot. If you feel your budget is already stretched, perhaps cut down on life’s luxuries a little and put the equivalent aside. You’ll be amazed how much can accumulate over the course of a year.

8 - Manage your debts While the team at Rachael Bell love to talk about all things investment and money growth, it is of equal importance to ensure that if you have any debt, it is well managed. Always make payments in full and on time for any credit card or loan you have and keep a constant check of the APR you are paying on your interest. Money is cheap to borrow at the moment and it may be worth consolidating your debt into one figure at a competitive APR - or in the case of credit cards transferring the balance to a zero per cent rate for fixed time.

9 - Be mindful of your financial wellbeing A study last year revealed that almost half of UK adults had suffered from money-related anxiety during the coronavirus pandemic¹    . This is understandable, given the uncertainty caused in such unprecedented times. While you cannot control a global pandemic, you can control your own budgeting and financial planning. Make a warts-and-all list of all your outgoings and set it against your income. This will give you a picture of reality from which you can plan the rest of your year.

10 - Consult with a financial adviser You might think ‘they’re bound to say that! After all, they’re financial advisers!’ While we’d love for you to use our services, what we’re actually saying is use any reputable wealth management firm if it means you are taking positive steps to manage your finances.Making your money work for you is incredibly important and you shouldn’t be afraid to pick up the phone and make that first call. It could be the best thing you do all year.

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. Equities do not provide the security of capital which is characteristic of a deposit with a bank or building society.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief generally depends on individual circumstances.
Rachael Bell Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products.
 

This release was issued on behalf of Rachael bell Wealth Management by James Higgins of 32West. Call 07553203234 or 01229 808306 for more information.

Editor's notes

¹ Source ONS Weekly Opinions and Lifestyle survey as reported by the BBC https://www.bbc.co.uk/news/uk-52527135 May 2020

Rachael Bell Wealth Management was officially established in December 2014.  Operating from their office at 3 Parkland Avenue, Parkland Village, Carlisle, Cumbria CA1 3GN, Rachael Bell Wealth Management form part of St. James’s Place Wealth Management Group.  

They focus on offering general financial advice and support, including guidance around pensions and smart investing. The Partner Practice is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products