Back to School, Back to Financial Discipline

Summer is over. Whether or not you have children going back to school, September is a great time for a financial review and reset. Many of us spend more over the summer, especially on holidays, and relax our financial discipline.

If summer has knocked your financial habits off track, then now is the perfect time to start fresh. It’s easy to let a little bit of laxity throw us off completely, and we’re here to tell you not to worry about it.

Why September is a Natural Financial Checkpoint

The end of summer is not the only reason to use September as your financial checkpoint. We’re also about halfway through the tax year, making it a sensible moment to check your progress and do a mid-year financial review in the UK.

You may have been busy over the summer with travel and family events that have to be crammed in to the period when the children aren’t in school. And you are likely to get busy again towards the end of the year. September is when you can take a breath and reset yourself.

We also tend to start to slow down a little bit naturally as the nights get longer and the leaves drop, making it a natural thing to review your finances in autumn.

What “Financial Discipline” Really Looks Like

It’s tempting to see “financial discipline” as the same thing as “going on a diet.” All about deprivation and dealing with your financial sins. That couldn’t be further from the truth. What we are looking for here is a positive reset, setting aside mistakes as in the past and no big deal.

Yes, you should absolutely review any summer spending drift…and I get it. I spend a bit more on summer holidays too, especially when my clients are away and things get less busy. But that doesn’t mean you’re looking to penalize yourself. In fact, tracking your summer spending from year to year will help you incorporate that drift into your overall budget and allow for it in your plans.

Revisit any goals you set in the spring. Have you achieved them? This is not about deciding whether you failed so much as assessing whether your goals are reasonable and achievable…or, on the contrary, too easy. You can then adjust your goals up and down to something you can reasonably achieve.

Automating savings and pension contributions makes them easier to keep up with, but you shouldn’t set or forget that – now is a good time to review those contributions and adjust as needed. In most cases you want to be putting in as much as you can afford to, but not at the expense of other life goals.

Financial Reset Checklist

Here are some things you should consider for your checklist:

• ISA/pension contribution progress for this tax year so that you can stay on track for retirement. Reviewing your pension should be a regular habit.
• Emergency fund(s) amount, making a plan to top up if needed. Consider what the summer says about how big it needs to be.
• Review summer overspend. Identify areas in which you tend to overspend, and keep them in mind for your budget.
• Revisit goals, including celebrating wins. Adjust as needed…but don’t forget to reward yourself for your successes.
• Check and rebalance your investment portfolio to continue to support your lifestyle
• Check estate planning. This is particularly important if one of those summer family events was a wedding or if your family has welcomed a child. But you should check periodically to make sure trustees are meeting obligations.
• Check where you are for the current tax year.
• Reset your budget. Don’t make huge changes to compensate for overspending, but rather look for small habits you can sustain.

Of these, the most important is to assess your goals and how they might be impacted by overspend. Regular overspend may mean you need to change your summer plans – or adjust your budget to accommodate them. If you’re routinely dipping into your emergency fund for travel, for example, that may mean you need an earmarked travel fund. Think about how important travel and holidays are to your life.

Other financial reset ideas include automated tools to track spending, recalculating your net worth, and examining expenses to make sure they fit with your goals and bring joy.

Small, Consistent Habits Beat Big Gestures

A financial reset doesn’t mean punishing yourself for summer overspend by, for example, depriving yourself for the winter to throw money into savings. It doesn’t work and I never recommend “cramming” as a financial plan or how to build better money habits.

Instead, look at how to adjust your smaller habits. Can you increase your savings slightly to compensate for putting less in during the summer? This is a good time to set new savings goals, but keep them reasonable. (For example, if you had a large holiday in mind, but couldn’t quite manage it, maybe set a savings goal so you can do it next year).

Regardless of your goals, though, just be consistent and always frame everything in terms of your life goals, short and long term.

When It’s Time To Get a Second Opinion

If you’re struggling to handle this on your own or not sure whether your plans match your goals, it might be time to get a second opinion. I’m available to set up a review meeting in which we can go over your finances and goals.

I can help you recover from summer overspend, plan better for it in the future, and even work out how to tie it into your goals – after all, we shouldn’t feel guilty about our holidays, or that second scoop of ice cream. There’s absolutely no obligation attached to this. My mission is to help people improve their financial discipline to achieve their goals, not for the sake of it, and I have many more financial discipline tips to share.

We also offer full financial reviews and if you run your own business, we can help with that too. Just let me know what you need and schedule a free, no obligation consultation via our contact us page. Let us help you with your financial health check this September and moving forward.