In difficult times like this, it is often the view of financial professionals to role out the mantra “to do nothing and stick to your plan” I politely disagree, now is the time to get very busy to help you navigate and make the most of this challenging situation.

I have prepared a short checklist of financial housekeeping steps that can be beneficial to complete in recessionary times. Focus on the ones that are relevant to you and action.

Financial Action List

• Bills: We all know it is beneficial to regularly compare the cost of our utilities, insurance and banking providers to the market for savings but our “crazy busyness” allows companies to profit. So now is the time to bite the bullet. There are many comparison websites that can be helpful.
• Budgeting: Many people are on reduced incomes so now is the time to review your income and your expenditure. It is the last thing anyone wants to do but it is probably the most powerful step you can take. Helping you to gain control of your spending will do your stress levels a world of good. How much is coming in and how much is going out? What are you spending your money on? Is it money well spent or required?
• Cash reserves: Review you case reserves in conjunction with your expenses, how long can you fund your current lifestyle without drawing on any assets/pension/borrowing? What is your plan if your cash flow is reduced for an extended time period?
• Debt: Mortgages can be an enormous expense and many of you will already have spoken to your banks in relation to repayment holidays. If not, review your expenses and arrange if necessary. The same applies to any form of debt you are making repayments on.
• Wills: Review/Implement your wills. Some solicitors will accept instructions even if they have not met you in certain circumstances.
• Gifting: Often the most painful aspects of transferring assets to the next generation is the tax liability. Now that many assets have depressed valuations, it may be time to take action to benefit from potentially reduced capital gains tax and lower gift taxes.
• Government benefits: Are you aware of all the government supports for your family and business? Spend time investigating.
• Pensions: Are you in receipt of a payment from a private pension? Do you have enough cash reserves to delay pension payments, so you are not selling in a depressed market? Talk to your pension adviser about options.
• Investments: Review your investment portfolio holdings, often when markets have significant falls, the dogs in your portfolio start barking. If you have made a poor investment it is often the time to face the pain as waiting, for it to turn into a good investment, will normally disappointment. Is it time to rebalance your portfolio or invest additional cash in the market? Contact your broker/adviser, if you have one, to review

As you can see there is plenty for you to get to work on. Many of them are rather painful but will do your peace of mind and your finances a world of good.

Author; Frank Mulcahy is a Personal Financial Manager at Trinity Financial Management and CEO of the educational investment journal The FM Report.

This article is provided on the strict understanding that it is for the reader’s general consideration only. Accordingly, no action must be taken or refrained from based on its contests alone.