On 21 December, it will be the shortest day of the year and the longest night. Traditionally, this day symbolises new beginnings with the subsequent return of the light. It’s also a useful time to reflect on our long-term plans for the future. There are various financial planning lessons we can learn around the Winter Solstice so we are ready for the new year ahead.

Balance is key

Life is all about achieving a sense of balance. At this time of year, when the balance of daylight and nighttime is shifting, it’s a good time to focus on balancing your spending. Think about your savings strategy versus living in the moment, as well as the need to work and rest.

Although there’s an instinctive urge to hibernate in the colder winter months, the festivities also bring us out of our homes to celebrate the season. Spending quality time with family does not have to mean spending beyond your means. It’s the memories you make together which will be remembered, rather than expensive gifts that can be easily forgotten.

Time of reflection

If you have time off during the festive break, then use this period to reflect on the past year. Could you have taken a different approach to your spending and how much could you have saved? If you don’t already have a monthly budget, create a list of outgoings, so you can track your spending. There might be areas where you need to cut back or take stock of your expenditure. Small changes can lead to significant shifts, which all add up in the long term.

Think about the things you want to achieve next year and what you need from a financial perspective to be able to realise your aims. When you create a sensible financial plan, you’ll have greater clarity on your priorities, and you’ll find it easier to save. Set a realistic savings goal for either the end of next year or sooner and include an emergency fund.

Patience is a virtue

Just as nature is patient during winter in preparation for spring, successful financial planning requires time and patience to allow for growth. As the days get ever so slightly longer, this steady change reminds us that progress takes time. Plan accordingly, including where you would like to be financially next winter.

Stock markets rise and fall, therefore, a long-term approach to saving and investing usually reaps better returns. Diarise seasonal milestones to check your savings and investments strategies to make sure you stay on track. Make adjustments, where necessary, and monitor your spending and cash flow to ensure you have enough to support your current lifestyle.

Prepare for seasonal changes

As the seasons change, life changes too, bringing new opportunities and sometimes unexpected crises. Apart from pre-planned, big life events, none of us can predict what’s in store for the year ahead. You might be planning to retire, or you might find yourself being made redundant. You or your partner might fall ill and be unable to continue working.

Being prepared for unexpected eventualities ensures that should the worst happen you have appropriate protection in place. During wintertime, review your insurance policies to make sure they are up to date and provide adequate cover for the year ahead. If you’ve included an emergency fund within your savings strategy, this can be a sound financial buffer.

Financial Planner, Nottingham and Lincoln

Successful financial planning can change your life in a meaningful way, but to achieve success, you need clarity on what you want to do. Spend some time this winter reflecting on your past year and then look forward to the year ahead. If you already have a financial plan, then consider whether it’s still relevant to your aims and aspirations.

When we first get in touch with our clients, we always have a quick chat to understand your needs and answer any queries. We will then arrange a 90-minute consultation to learn more about your priorities, along with any concerns or immediate advice that’s needed. You’ll then receive a written proposal with recommendations on potential improvements, our fixed fees, and some simple financial planning steps. We can then start building your financial plan.

While producing your financial plan, our team might ask you a series of thought-provoking questions. This enables us to gain a full picture of you and your financial situation and it ensures that we tailor our approach to your exact needs. When mapping out your financial future, we use sophisticated financial planning software. Once your financial plan is built, our financial planners will follow up with you in terms of your progress.

Why not talk to us about building your 2025 financial plan? Get in touch to speak to our financial planning team.

Sources:
(Balance: Wealth Planning website)
https://www.hsbc.co.uk/financial-fitness/everyday-budgeting/5-ways-to-manage-your-money-through-winter/