14th January 2016
Ahead of Blue Monday, the day marked as the most depressing of the year, Tony Stenning, savings and investment expert at BlackRock, takes a look at how consumers can dodge the financial doldrums…
A way to ensure next year’s Blue Monday is much more vibrant is to take care of your financial health throughout 2016.
As a father of three I completely understand that there are many calls on your time, however the good news is that with three simple steps you can ensure your finances look much more optimistic come the end of the year.
First, simply make a plan. Two in five Brits have negative feelings towards saving money, including 14% who feel worried and 12% who feel powerless and anxious, according to BlackRock’s Investor Pulse survey.
Having a plan helps you visualise your financial future and understand what you want, you can then calculate whether your savings will be sufficient for your needs later in life and if not, allow you time to close any gaps between aspiration and reality.
A financial plan helps to increase wealth and reduce worry.
Second, pay off debt as soon as you can. The UK seems to have become a nation of spenders, largely based on debt.
Outside of a mortgage, on average Brits owe £4,000 and three in 10 (28%) have outstanding credit card balances that they don’t pay off each month. Yet over the last year, Brits saved around £2,110 into their bank accounts. While paying off debt might eat into savings in the short-term, you’ll be rewarded over the long-term.
And third, end relationships that aren’t working. In this case, I mean the nation’s love affair with cash.
Outside of a pension, Brits have more than two-thirds (67%) sat in cash but admit they would ideally hold less than half this amount. It’s important to consider the power of time when it comes to making your money work harder for you.
As Einstein said the eighth wonder of the world is compounding – the more you leave in cash the longer it will take to reach your financial goals. Small adjustments can make big differences in the long-run.