Try resetting your New Year financial resolutions

For most of us, the start of the new year brings a familiar ritual with the setting of resolutions. Often, these resolutions can be of a financial nature, with research showing that around one in three people set money-related goals every January.

As private bankers, we often get asked what advice we would give for the new year. Our advice generally covers areas like the optimisation of savings and borrowings, planning for tax bills, fraud protection, and updating key paperwork.

The first weeks of the new year can be a great time to review your bank accounts. Are your savings held in the most effective way? Have you made full use of your tax-efficient allowances? Is your borrowing structured to support the decisions you want to take this year? How could your money work better for you?

Around one in three people set money-related goals every January, according to research (Picture: stock.adobe.com)

Today, most banks make decisions driven by algorithms and standardised criteria. While this route can be efficient, it rarely accounts for complex or non-standard circumstances. This can put certain types of customers at a disadvantage – so, an entrepreneur who wants to invest more in a business, or older clients who want to take out a new mortgage.

As a private bank, we take a relationship-led approach that involves speaking to a banker who is empowered to explore and understand a client’s wider situation, enabling us to uncover more flexible and tailored solutions.

For business owners and the self-employed, January brings a flurry of demands from HMRC. After the expense of the holiday season, self-assessment tax bills must be paid by January 31, and for companies with a traditional year end, corporation tax was due on January 1.

The important thing is that funds are set aside to meet these demands. If not, can your bank help to smooth out these spikes with flexible deposits or borrowing? Planning ahead now for next year’s tax demands can reduce stress and preserve cash flow and liquidity.

​Clare Ansell, Banking Director, Hampden Bank

Good financial planning is not just about meeting immediate obligations. Looking well ahead – six months, a year or several years – can open up opportunities that might otherwise be missed.

Worryingly, financial fraud continues to be on the rise. One of the most valuable new year resolutions you can make is to tighten the security around your finances by refreshing your digital passwords.

Your devices matter too. Ensure the security settings and anti-virus software on your phones and computers are robust and up to date. The most secure financial accounts will also use biometric checks such as fingerprint or facial recognition.

Hoping for the best while preparing for the worst is tried and tested advice. Wills and beneficiary forms are among the most important documents that you will ever update. Your will should reflect your wishes today, not a version of your life from many years ago.

These are the kinds of new year financial resolutions that won’t have faded by February. They create momentum, clarity and control – setting you up not just for this year, but for long-term financial confidence.

Clare Ansell, Banking Director, Hampden Bank