The Brexit divorce billWhether or not you’re the kind of person who sees the start of January as the time to set yourself resolutions and stick to them, the period after the excesses of Christmas and New Year is arguably one of the best times to actively get your finances into shape. Here are five great money-related resolutions it’s definitely worth committing to in order to make 2018 the year you take control of your money.
- Start a budget – The secret to financial security isn’t making lots of money, but sensibly managing the money you have. A budget is the best way to start doing this, ensuring you know where your money is going and sticking to the plan you lay out for yourself. It can feel intimidating at first if you’ve never budgeted before, but it will undoubtedly help you to cut out overspending and reduce your money worries.
- Manage your debt – Getting out of debt can seem a long way off if you don’t make plans for how you’re going to become debt-free. There are no shortcuts – it takes both time and sacrifice – but once you do manage to clear your debts completely, it’s a liberating feeling and opens up many more opportunities to help you grow some savings.
- Start saving regularly – Once you’ve got your debts and spending under control, building your savings is essential. You should aim to save at least 10% of what you earn every month. Again, you may have to make a couple of sacrifices here and there in order to do this, but when you have those savings earning you money in your nest egg, missing the occasional night out or frivolous treat will feel completely worthwhile.
- Increase your financial knowledge – This can be as simple as finding a book, magazine or reputable website and dedicating a little time each week to increasing your money know-how. Anyone who has financial security hasn’t done it through luck, but through understanding what to do with their money, so the more you learn the more secure your finances are likely to be.
- Start investing – Making some sound investments is often the crucial step from financial security to prosperity and success. However, you should only invest when you’re ready (i.e. once you’ve achieved the previous four goals). It’s worth getting good independent financial advice as well to ensure you make the right investments for your personal circumstances.
The Brexit divorce bill
Thursday, December 7th, 2017Since before the EU referendum result was known at the end of June 2016, the ‘divorce bill’ – the money the UK will need to pay to the EU as a result of Brexit to cover its financial liabilities – has been a hot topic of debate. It continues to be so, with the latest reports of a figure somewhere around €55 billion having been agreed by the government emerging at the end of November. Downing Street have dismissed this figure, but even if we don’t know the exact amount, it seems likely that an agreement on the way the divorce bill will be calculated has been reached, in order to allow other points of negotiation to progress.
Even if the figure of €55 billion eventually proves to be accurate, what will that actually mean for the UK? The response from some leading economists has been to suggest that, in the grand scheme of things, the divorce bill won’t make a major difference to public finances. One argument for this is that a considerable chunk of the bill will be made up of money that the UK would have been paying anyway if it was remaining in the EU.
Another element to consider is the wider impact of Brexit on UK growth in the years to come. The UK’s reduced ability to trade with the EU is predicted to have a far greater impact than the agreed amount of the divorce bill, whatever that may be, thanks to the potentially higher costs generated. If Brexit results in a negative impact on growth, as leading economists widely believe will be the case, then the divorce bill may well be relatively insignificant in comparison to the overall losses experienced by the UK.
Whatever the final deal with the EU turns out to be come the end of March 2019 when Brexit becomes a reality, it’s highly likely that the UK will be paying for the decision to vote leave for years, if not decades, into the future. The hope is that agreeing the divorce bill, whenever that might happen, will allow Britain to move on to working out how to use its exit from the EU in a positive way, creating new opportunities to balance out the financial obligations the country has agreed to honour.
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