Household and personal spending and finances need constant monitoring to ensure they stay on track and investments are no different. Here are five actions every investor could take to improve the health of their savings and investments.
Set out your plan
Having a plan, knowing what it is and sticking to it will help you save more and invest wisely. Write down your goals before you review your saving and spending habits. What do you want to achieve? How much do you want to save? What are you saving for and when? Can and will you save money in 2017?
It’s important to be realistic at this stage: are you looking to save for a big new purchase such as a car or a house, or are you saving for a rainy day fund?
Trim the fat
No matter how good we are at budgeting there will be things that you waste money on in 2017. Keep it simple and try and pick out the five top ones that cost you the most. This may not be the big ticket items instead it could be money spent on snacks, sweets or the coffee on the way to work in the morning.
Target specific areas
Focus on a few areas to address such as utility bills or reviewing your mortgage, set a diary for when your insurance policies are due for renewal and do some research to cut costs. Comparison websites and shopping around could save you more than you think. It could be as simple as getting smart with your weekly food shop, which could save you a fortune.
Put your investments through their paces
Time to put the fund managers through their paces. If you have investments, it’s worth seeing how a manager has done in 2016, but also how they have done longer-term – over at least five years.
Critically assess their performance. Have they beaten their benchmark? How do they compare against their peers? If they haven’t lived up to your expectations, why not? In exactly the same way that you should review your mortgage or insurance, any underperformers need to justify their place in your portfolio for 2017.
Set yourself goals for 2017
Make some objectives for 2017. For example say “I am going to reduce spending by £100 a month”. Decide how much you are going to save each month and stick to it. Achieving those milestones can be very rewarding.