By Daniel Hough

Just a few weeks into 2024, it looks like the year ahead will be just as eventful as the previous 12 months.

While inflation appears to be under more control, interest rates look likely to remain relatively high for some time yet, the Scottish economy remains in an uncertain place, and we have the small matter of a UK general election to look forward to.

All of this will have an impact on people’s personal finances in 2024, as will the income tax changes that were announced by the Scottish Government at the tail end of last year. So, with the vast majority of the year still in front of us, there is still plenty of time for people to take control of their finances and put themselves in a better place for 2024 and beyond.

If you haven’t already, start by clearing away the Christmas cobwebs. The festive season invariably brings added expenses, whether it is socialising, present buying, or getting away for New Year celebrations. Having a solid budgeting plan for the year is crucial and sticking to it will help keep you on track with savings and avoid unnecessary expenses.

Similarly, reflect on what you'd like to achieve over the short, medium, and long term when it comes your financial goals. It's generally advisable to have around six months' worth of essential expenditure in an easy-access savings account. If you already have a ‘rainy day’ fund and are saving for events that are at least five years away, consider the stock market which has tended to outperform cash over the long term.

The start of the year is also a great time to check the value of your pension pot. Understanding how much money you've saved up helps gauge whether you're on track to achieve your retirement ambitions and whether any adjustments need made. Seeking professional advice can provide support in calculating the projected value of your pension at retirement and the annual income you can expect.

In case of a shortfall, explore the option of topping up your pension. Pensions offer a tax-efficient way of saving for the future because of the tax relief on personal pension contributions. A £100 pension contribution costs just £80 for a basic-rate taxpayer, £60 for a higher-rate taxpayer, or £55 for an additional-rate taxpayer.

On that note, you will also want to assess whether you are taking advantage of all the available tax allowances – particularly as the tax year ends in April. At the very least, maximise the opportunity to invest up to £20,000 in an ISA. Other allowances, such as the capital gains tax exemption and the dividend allowance, are due to be reduced in April 2024 – so, where possible, try to use what you can from the current arrangements.

The new year is also an ideal time to check your current insurance policies and ensure they are up to date. Having the right protection is crucial to ensure your family's finances hold up in the event of unexpected illness or death. If the level of cover is too low, your loved ones could be at risk of financial hardship in the worst-case scenario.

Finally, making or updating a will is one of the most important things you can do. It ensures your assets go to who you want after your death, and that your wishes are carried out as you intended. If you've already made a will, consider whether it needs amended, especially if your personal circumstances have changed.

Although the year is already a month old, it’s not too late to make resolutions for 2024 – or even just get into some good, new habits. Becoming more engaged with your finances could be the simple financial resolution you need to kick-start the new year, avoid making costly financial mistakes, and more generally put you on a better financial footing for the year ahead and well beyond.

Daniel Hough is a financial planner at wealth manager RBC Brewin Dolphin