Start the New Year off on the right financial footing

As we start the new year and ponder how fast the last 12 months have disappeared, many of us find ourselves thinking about our aspirations for the future.

Let’s face it, we’ve worked hard throughout the past year, and now is the time to reflect on what we have achieved; where we want to go; and what we need to get there. These times of reflection are critical to our lives whether we run our own business, are employed, or retired.

A financial checklist is an excellent tool to see how you are progressing towards your goals and to help identify any specific areas you might need to focus on in the immediate future.

The key issues to consider are:

Home loan review
If you’re still making repayments, is it time to revisit your progress? Are you able to increase your payment amounts or frequency to save interest? If you’re locked in at a fixed rate have you checked to see when your loan may roll over to a variable rate and what this may mean for your cashflow?

Other debts
Review the amount of personal loans, credit cards, or other debts currently being paid off. If the total of all loans exceeds 10% of household income, you may need to implement a plan to reduce them as a matter of priority. Consolidating debts could help control interest costs but take steps to ensure this doesn’t become an excuse to spend more.

How much money did you save this past year? Are you spending first and saving what’s left? If your savings aren’t as healthy as you would have hoped by this time of the year, it’s a good idea to pay yourself first by allocating up to 10% of your income to a regular savings plan.

When illness or accidents strike, most people are caught insufficiently protected. It’s important to regularly review your insurance policies to ensure that you and your family have adequate cover. When was the last time you reviewed your insurance?

What is the current value of your super? If you don’t know, now is a good time to check. Is it working as hard as it should be? Are the fees reasonable? Are you on track to meeting your retirement needs or should you start making extra contributions?

Your Will
Making a Will itself is not particularly difficult or even expensive. It is a fact of life that people get married, have children, change relationships, get divorced or establish new interests. Left unaddressed, any of these may result in a Will being legally challenged. Estate planning matters such as Powers of Attorney and Medical Directives should be regularly reviewed in addition to your Will.

Review your finances today, and you may find that your other ‘New Year’ resolutions are more easily achievable as a result!

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

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