Financial tips for the New Year

Financial tips for the New Year

Instead of Gyms, Drink and Cigarettes, think about giving your finances the resolution treatment this year

Another year has ended, 2018 has begun with many people looking to make a fresh start, new beginnings and change their lives for the better.  While this is a worthy goal, too many people forget to consider the financial implications of resolutions or their personal finances full stop.  So, while the idea of change for the better is in your mind, why not consider ways to make your finances healthier this year.

These ideas, unlike some of the other resolutions people make at the start of the year, don’t have to be done straight away, many of them can’t.  Rather, use this guide to consider how some or all of the points mentioned can help you manage your finances a bit better with the goal being to either save more or pay less to the bank and get the benefit of extra money down the line.

1: Decide on your goals

First and foremost, consider what you need to tackle and look to how you may achieve your desired effect.  Are you looking to start a savings plan, pay off some debt or loan, discover new investment options or could you do with consolidating debt to save interest payments?

Writing down your financial requirements and situation may allow you to consider what you need to do in order to accomplish your goals, seeing can be believing.

2: Get your mortgage into shape

If you already have a mortgage, there are three things you should be thinking about this year. The first is checking you’re on the right rate; after all, one thing we’ve learned from the Clausula Suelo scandal is we can’t rely on the banks to get it right for us.

The second is to consider a switch to another product or competitor. A short term outlay that comes with switching banks could save you in the long run.  If your conditions are not favourable, a switch could save you a noticeable amount on a monthly basis.

Thirdly, pay extra. Crazy right!  It may not be.  If your mortgage allows it and has no charge to make one off payments, a little saving through the year can work wonders on the long term cost of a mortgage.  While you could be doing something else with your money, inching away at your mortgage is hard to beat. A little effort can, over time, produce substantial returns.

By overpaying an amount every year you’ll reduce what you owe the bank and reduce future payments or cut the term of your mortgage. It also means you’ll cut your interest bill. And paying less interest to the bank is something everybody can appreciate!

3: Consider your pension

If you have one, take the time to read your annual pension benefit statement and figure out how your retirement is shaping up. You owe it to yourself.

And if you don’t have a pension, is it time to think about getting one?

If you have spare cash you can make extra contributions, increasing your pension and your tax benefits. But if your pension is going nowhere, why reward your non-performing fund manager even more?  So many UK Pensions are underfunded and in danger, is leaving it with them the right thing to do?

4: Bump up your savings

Deposit rates may be on the floor but the banks will still charge you a handsome amount to borrow from them so why give them your hard earned money for nothing?

A look at alternative investment options to the banks could increase your return substantially without having your money tied up for a number of years.

Using an investment management company comes with a cost but if you can earn 4% on a well-run investment, after costs, it will still give you more than double what you could probably earn in a bank deposit account.

5: Take control of your debt

While mortgages may account for most of a person’s debt, expensive, short-term debt is also a factor, for example, more than one-third (36 per cent) of credit cards have balances of between 75 and 100 per cent of their limits.

If you have too much debt weighing on your credit card, try and make some inroads this year.

If you have a high amount sitting on your credit card at a rate of around 20 per cent, cutting that down would be one of your best resolutions this year.  Instead of just paying the minimum every month, try to add something every month off the debt.  With the amount of interest charged on cards, a little goes much more than a long way!

If you want more information on any of the above topics or anything else related to your financial needs, please feel free to contact us on any of the following ways in order to set up an appointment for a free financial health check and see how a financial advisor can assist you.

Prepare with Pennick Blackwell and minimise the risks to your money (and health!)

Estate Inheritance and Tax

Benjamin Franklin’s oft quoted line about “nothing can be said to be certain, except death and taxes” is one we all are too aware of.  The spectre of both haunt us constantly through our adult lives and it seems the older we get, the more familiar we become with both burdens.

However, Franklin never knew the difficulties of the relationship between death and taxes when you add another country or two into the mix!  Like most of us here in Spain, we all have someone who is either back in our home country or has assets in another country that can muddy the waters when it comes to inheritance after a death.  If you think that in a country like Spain, each region has their own inheritance rules, how more complicated does it get when you add another country into the mix, or more than one…

When dealing with this sensitive issue, preparation can take a lot of the hassle out of the situation for the people dealing with matters after you’re gone.  Losing a loved one is hard enough on anyone, having to deal with the added stress of remaining assets and investments is not something they should have to battle with.

We have dealt with clients who have had hit brick walls dealing with banks, investment companies, siblings and the tax men in both the UK and Spain, all the while just trying to cope with the loss of a loved one and it’s not a situation that anybody wants to find themselves in.

Knowing how to address a situation can often be half the battle and by having an informal chat with us we can guide you in preparing for the event and show you how you and your loved ones can benefit from all the options available to ease the passing and not get caught up in tax worries.

Working together, we can look at your situation, your needs and the implications of Inheritance Tax specifically to you and look at ways to lessen the blow and make sure no charges are taken without being known about.  We can help explain Domicile situation versus residency and how it affects you and your situation, see if you are liable for Inheritance tax, calculate what you may have to pay and look at ways to disperse your assets now to lessen the impact later on.

Estimates put the amount of people who could be liable to pay Inheritance Tax on worldwide assets and are prepared for it at as low as 27% of people.  If you are an expat, if you have enjoyed a successful life, if you want to enjoy your retirement and look after your loved ones, it pays to have a (free no obligation) discussion about your situation to see where you stand.

Pennick Blackwell, with our strategic partnership with Neofin Asesores, can assist you when it comes to pre planning for the inheritance and distribution of assets or assist and advise you how to plan for this eventuality and take the stress out of the situation for those who have to deal with it.

By speaking to someone who is in a position to help and knows the pitfalls and problems that can arise, you can avail of all the advantages possible in order to help you plan your wealth and prepare for whatever eventuality.  If you live in Spain, but are not Spanish and have holdings elsewhere do you know your tax liability both in Spain and back home?

A famous play (and more famous saying) says that “You can’t take it with you”, however, with thought, consideration and planning, you can decide where it goes and who gets it when you leave.

Prepare with Pennick Blackwell and minimise the risks to your money (and health!)

To invest or not to invest, that is the question!

I was speaking to a young parent the other day, young children and not old himself at only 37. However, as we spoke and the matters progressed, it dawned on us that he had no consideration in regards to his children’s future financial needs, nor how he could satisfy them apart from the usual work hard and stay employed route.

What he, and many others in his position was missing is that it really is, never too early to start saving for the future. At 35 we all think that the world is laid out for us and we have our lives to live, but, any parent out there knows, the time seems to fly by, where once you held them in the palm of your hand, now they are browsing shops and soon will be looking to college.

We come back to the old misconception that a Financial Adviser is for the wealthy, which is not the case. A Financial Adviser looks to help you look at your situation, provide ideas how to plan for the future and gives you advice on how to obtain those goals. You do not have to use the advice, but can you afford to pass up a free chat!

Investment Funds, Fixed Deposits, Shares, Bonds, Regular Savings Plans, SIPPs, ISAs, the list goes on and on, but do you know how they can help you and which one to choose? A simple, obligation free chat with a Financial Adviser can help you make decisions now that will benefit you in 10 to 15 years’ time… think that is a long time still, it’s as long as the Euro has been in circulation! Any parent with a 10 year old will tell you, they just grew up in an eye blink. The days mount up, so can your savings if you look after them.

Chat with a financial adviser and discover how you can provide for the 18th Birthday, the college education, a Grandchild’s 21st or the wedding you swore you would never indulge in way back when! The simple matter of life is that money will be needed when you least expect it and you need to know how to deal with the demands.

Do you have a pension? Do you know how to set one up? What benefits can you enjoy by having a pension plan in place, even a private one? Look around you and think, how many of my peers are set up for later life? I’ve had a look recently and I can pretty much guarantee that 80% of the people I see on a daily basis are not prepared for their financial future. What will you do when you retire or something happens that needs paying? A client contacted me last week to cash in one of their pensions as they have to pay for both a Wedding and a Funeral in the next month, it can strike that quickly and you need to be prepared!

However, being prepared is easy, a quick, informal chat to set out some guidelines and, more importantly, get you thinking about it, will show you how easy it is to set the wheels in motion and pick the way to save that is best for you!

Investment Funds, a solid way to invest

Many people shy away from Investment Funds in search of a more secure and guaranteed return on their investments. However, a proper Investment Fund, with Investment managers behind it, should always make money as they have the power to move the underlying investments around to maximise growth as the market changes.

You can put your savings in a Deposit Account but in the current Market and its terrible interest rates, you are really only lending your money to the bank, virtually interest free. They, I’m afraid to say will not treat you the same when offering you a loan!

It’s a sign of the times that even most banks will try to steer you to Investment Funds when you go in with “New Money” as not only is it, usually, the better option right now, they make higher margins on it as they invest you in their own “in house” funds.

However, an independent Fund Manager will not be looking to use certain funds just to get a higher bonus at the end of the year, they look to the best option for their client’s money as, the bottom line for them is, the better the fund performs, the more they make by administering it.

A well run investment fund, and there are 1,000’s, is a great option for investing money. Even if the fund does not live up to its predictions (Most funds will claim an annual return of 3-6%) it should still outperform any Deposit account being offered by a bank.

Here at Pennick Blackwell, we don’t just tell our clients to invest in a Fund and watch your money grow. Through our free financial review, we examine a client’s individual situation and make our recommendations based on our fact find. And it is just that, a recommendation. If a client does not “feel it” for any reason, we understand. In our review, we would offer various investment opportunities, explain them all and get the client’s feedback in order to fully explain the situation.

Many people are under the mistaken belief that a Financial Advisor is just for the wealthy people to get more money, in reality that could not be farther from the truth. Anybody can consult a financial adviser and benefit from a free financial health check, like we provide here at Pennick Blackwell.

Are you planning for retirement? A life changing event? Looking after an inheritance? Looking to provide for Grandchildren when they set off for college? There are many ways to save and many ways to invest, it is not all about what your bank will tell you, they are biased towards their own products and many people have lost huge sums of money by believing their friendly neighbourhood Bank Manager. It does not matter if you have € 10,000 or € 100,000, an independent adviser will give you options you may not have known about and could open your eyes to a different option.

What we guarantee is a free, no obligation review of your situation and a full explanation of what you can do with your savings, depending on what you are looking for, long or short term, risk free or not, we will explain the options to you and let you make the decision.

Prepare with Pennick Blackwell and minimise the risks to your money (and health!)

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SPAIN’S stock exchange has suffered its worst month in three years amid serious worries over the economic situation in China.

The Ibex 35, based in Madrid, closed August with a drop of 8.24% on July.

The final session, on Monday, closed with a fall of 0.91%.

Yesterday, trading was also slightly down, although not as bad as some had feared.
It comes as stock markets across Europe are stuttering in the wake of China’s sudden economic slowdown.

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