Elections Matter … But Your Life Transitions Are More Important
Many people in America are now feeling as much anxiety about the end of this contentious presidential election as they were feeling during the many months of campaigning. It is impossible to predict with 100% accuracy what a new president and a new Congress (or in our case, a new Prime Minister and Government) are going to do. That feeling of uncertainty can send out ripples through our financial and political systems until we get a clearer picture of the agenda for the next government or administration.
As important as elections are, we believe that a solid financial plan gives you the tools to keep improving your ‘Return on Life’ no matter what is happening with your nation’s politics. Instead of fretting about what may or may not happen in the political arena, try to focus on these three areas of your life that will help you control major transitions:
- You can’t control the economy … but you can control your career.
Elections sometimes spark short-term volatility in the financial markets. But the economy is bigger than any one president or government, especially while Covid-19 continues to change everyday life and global business.
As companies continue to adapt to the pandemic landscape, job opportunities are becoming less centralised and more diverse. You might be able to take your dream job on the other side of the country without leaving the home your family loves. Or you might spot an emerging market in the middle of all this displacement where you can open your own company.
- You can’t control taxes … but you can control your saving and spending.
All political candidates talk a lot about their tax plans in the campaigning leading up to an election. Actually sticking to any plans or promises often turns out to be much harder in reality.
Whether your preferred candidate wins or loses, there’s no guarantee that your taxes are going up or down (although, as the pandemic extends and Government financial support extends with it, we can be fairly sure our taxes will increase in the coming years). However, you definitely can anticipate when your children will be going to university, if you’ll need to replace the family car soon, or if you want to move to a seaside cottage when you retire.
Admittedly, the tax you have to pay will play a role in handling these transitions. But your levels of saving and spending have a bigger impact on your financial plan than any other factor. If you have never kept a monthly budget before, make 2021 the year that you start. Sit down with your partner or spouse and weed out all those recurring subscriptions and memberships you are not using. Make a weekly meal plan so you are not eating out so often. The couple of hundred pounds you could potentially save every month could grow into a comfortable padding for your nest egg over time.
- You can’t control who is in government … but you can take control of your financial plan.
Per the clamour on social media across the pond, is this really “the most important election of our lifetimes?” It could be decades before we have enough perspective to judge. But as far as your financial planning goes, here is another way to think about presidents and governments:
A 67-year-old eyeing retirement might have taken their first part-time job when Harold Wilson was Prime Minister for the first time, in the 1960s. As of 2020, that person has lived and worked through 11 different Prime Ministers and 10 different American Presidents.
It is very doubtful that you are going to love every single government or Prime Minister who serves during your career. Yes, certain things that each one does might move the needle on your retirement savings in the short term. But it is people who stick to their plans and continue to save and invest, regardless of what is happening in the outside world, who build long-term wealth.
No matter how you feel about the US election, or how the UK Government are managing, you can take action today to keep your financial plan on track. Let us know if you would like to revisit your financial plans and we will schedule an appointment to start planning for 2021 and beyond.