5 powerful ways to achieve your financial goals in 2024
You may be considering what you hope to achieve in the new year. The start of a new year can be the perfect time to make changes in your life, whether that’s to exercise more, eat less or become better with your finances.
It also provides the perfect opportunity to set some new and exciting goals. If those goals are financial, they could help you to enjoy a better standard of living, jet off on a dream holiday or move into the house of your dreams.
While creating goals around your wealth is always a good strategy, there are ways to increase your chances of achieving them. Read on to discover five important considerations that could help you to create a more robust financial plan and accomplish your objectives in 2024.
1. Have clear objectives
Any goal that does not have a clear objective is more likely to fail, and financial goals are no different. That’s why it’s important to be crystal clear about what you want to achieve, why you want to achieve it and when you want to achieve it by.
The 2023 Financial Wellbeing Index by Aegon showed that creating a definite picture of what you want to accomplish can help boost your chances of fulfilling it. Furthermore, the research also found that those who create a financial plan tend to do better with their money.
Yet just 17% of people have a strategy in place to reach their long-term money targets. Creating a plan with clear objectives could help ensure that you’re one of those who goes on to meet them.
One thing to remember though, is that once you have a clear objective, ensure you put a monetary value on it. This could provide a clearer understanding of how close you are to achieving it.
2. Ensure your goals are realistic
While it’s always good to be optimistic, it’s also important to remain grounded when you create your objectives, as being overly unrealistic could increase the chances of you being disappointed. Having an objective that stretches you but is possible increases your chance of achieving your goals.
It also means that you’re more likely to stick with your plan should things become more challenging, perhaps due to a change in circumstances.
3. Take inflation into account
Inflation measures the increase in the price of goods and services over the long term. As this means that £100 is likely to buy you less in the future than it would today, you’ll need to take inflation into account when setting your financial goals.
To demonstrate how much of an impact inflation could have on your long term objectives, you may want to consider the Bank of England’s (BoE) inflation calculator. It reveals that you’d need £174 in October 2023 to have the same spending power as £100 in October 2003, which means that your money would have had to grow by nearly 75% just to keep pace with inflation.
If your wealth is not keeping pace with it, it will be dropping in value in real terms.
4. Maximise your tax-efficiency
While you may not realise it, the government provides several ways for you to reduce your tax liability. This could be through tax relief, or the use of various allowances and thresholds that may be available to you.
One way you could reduce your exposure to Income Tax, for example, is to check your tax code. According to Money Saving Expert, millions of people pay the wrong amount in Income Tax due to errors with their code, which may mean you’re paying more than you really need to.
By reducing your liability to Income Tax, or any other form of tax, you might be able to boost your wealth and achieve your goals more quickly. To work out whether you may have overpaid Income Tax, please visit Money Saving Expert’s code calculator.
5. Consider investing your money
At the end of 2023, interest rates on savings accounts were higher than they had been for many years. While this may make cash savings more attractive, it’s worth considering that historically, the stock market has tended to outperform cash accounts over the longer term.
According to an article in This is Money, the 2023 Barclays Equity Gilt Study found that shares provided a real average annual return of 2.9% during the 20 years leading up to 2022. The study, which tracked the nominal performance of £100 invested in cash, bonds or shares between 1899 and 2022, also revealed that cash returned -1.1%.
In addition, it also revealed that if you had held shares for five years during the period, they would have outperformed cash in 90 of the 124-years. If you’d held them for 10 years, this increased to 103 years.
With this in mind, you might want to consider investing your money, as it may boost your chances of achieving any long-term goals that you may have.
Get in touch
Another way you could increase your chances of fulfilling your goals is to work with a financial adviser. They could help you to create a plan and explain the most suitable way to achieve your objectives.
Furthermore, they can carry out regular reviews with you, so that you can understand if you’re on track to achieve your aims, and if not, how best to get your finances back on track. If you would like to discuss ways we could help you to achieve your financial goals in 2024, please contact us on 01527 577775 or speak to one of our advisers, as we’d be happy to help.
Friday 15 December 2023