How to survive and thrive in another year of austerity
With the promise of yet more austerity from Chancellor George Osborne, how should Christians combine both faith and common sense in the new year? Aidan Vaughan from the Association of Christian Financial Advisers refuses to succumb to the gloom. Among his top financial tips for 2013 is 'stay generous'…
While 2012 may have been the most successful year ever for UK sport, the same just can't be said for the economy. We had 'double dip' recession, declining real standards of living and an admission by George Osborne that we are two years behind in the recovery. Britain's debts are set to stay at their present high levels until 2016-2017.
Nevertheless, as Christians we should view the world from a different perspective. For those who carefully watch the signs of the times there are some useful economic developments ahead. The great Quaker industrialists who founded the building blocks for modern businesses - Cadbury, Clarks, Unilever, etc – thought nothing of mixing commerce and spiritual matters! So here are some practical as well as faith-based New Year financial resolutions.
1. Stay generous in 2013! Your gifts have a spiritual 'multiplier' effect – they bless the recipient, facilitate the work of Christ on earth and bless you too. Giving could be your best investment.
2. Be flexible in the jobs market. Unemployment should peak in 2013 at just over eight per cent, but the total number of hours we work are nearly as high as before the financial crisis. So 2013 could be just the time to improve your skills and be willing to take a pay cut to get wider experience.
3. Avoid the debts of desperation, especially payday loans at outrageous rates of interest. Steer clear of credit card loans, too. If, you are in debt trouble, seek urgent help from the Citizens Advice Bureau, Christians Against Poverty, etc. This is one of those times when a stitch in time really does save nine. Few people will mind receiving smaller gifts if they know it is keeping you from debt.
4. The world is changing, but is your portfolio? Large parts of the world are enjoying some stellar rates of growth and there are some very encouraging signs of recovery from the US. There is unquestionably a 'bubble' in many fixed interest investments. Make sure your portfolio, small or large, adequately reflects the investment scene for 2013.
5. Be encouraged to make the most of your tax breaks if you can afford to. From April 2013 the ISA limit will be increased to £11,520. The amount that you begin to start paying tax has been increased to £9,440 from April 2013, more if you are an older pensioner.
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6. Plan and Budget! You will be amazed at exactly how your money is spent, on a daily, weekly, monthly and annual basis. Your budget will tell you the difference between a 'want' and a 'need'. Not only that, but you can start to deal with some of the bigger questions about life goals.
7. Pensions are still important. While there have been limitations on how much you can contribute and the maximum allowable fund, there are still some great tax reliefs and planning opportunities. As time goes on, all employers will have to allow you to contribute to the new government NEST pension scheme, if another quality alternative is not available.
8. Keep an eternal perspective! Remember God owns it all – the earth and all that is in it. This makes us stewards of creation and the resources at our disposal. One day, we have to account for our lives.
9. Seek advice – and from good sources! From 1st January 2013 all financial advisers will have to separate advice costs from product costs. Good advice can make the difference between success and failure.
10. If you are blessed with talents and resources, don't be afraid to 'step on the gas' and make a real difference in 2013. Start a new business, make an investment, spend some money wisely. Remember, Jesus commended the two servants who invested wisely and was furious with the one who just buried his talent. Have faith, be wise – and go for it!
Aidan Vaughan is a member of ACFA, the Association of Christian Financial Advisers. ACFA aims to be the voice of Christian financial advice and champions best practice in the UK. The ACFA website offers links to Christian financial advisers across the UK www.christianfinancialadvisers.org.uk