Create a great financial new year

New Year’s resolutions are easy to make but often hard to keep. But there are real benefits to making financial resolutions. Here are some helpful suggestions to get you started.

Chances are by now, you’ve forgotten what you wanted to achieve last New Year’s Eve, but a new financial year is also a great time to reset.

Get back to basics

If you find it near-impossible to reach your financial goals, you may need to revisit the basics: sticking to a budget. Does temptation usually unravel all your good saving intentions? Consider opening a locked savings account that you can’t deduct money from for a period of time, and automatically transfer funds into it each payday.  Automating everything in your life that can be is truly a gift!

Plan for large purchases

Whether you need a new fridge or are considering placing a deposit on a home, the earlier you start planning for these purchases, the more manageable they become.

If you know you’ll need a new item in 6 months that costs $1,000,  that means you need to set aside around $40 per week to make it happen… that’s a few sneaky coffees that may need to go!

Set up an investment plan

If you’re considering investing this year (instead of someday,) developing a sound investment plan is essential for your success. This may include working with your financial adviser to identify clear financial targets, calculate how much you can afford to invest and determine how much risk you’re willing to take on. 

If you’d like to have a small nest egg before you sit down with someone, again, automate the process so every week you’re setting aside an amount to put towards that portfolio.  Everyone started somewhere!

Review insurance policies

Knowing you are properly insured provides peace of mind if your circumstances change unexpectedly. But identifying appropriate insurance policies and levels of coverage for your unique situation can be difficult – and getting it wrong is risky… as you’ll likely find at claim time. This is why it’s important to regularly review your insurance policies with your financial adviser, especially if your situation changes.

You may be able to find that funding via various structures frees up cash flow to invest in personal insurances you may not have otherwise been able to afford.  Good advice is worth every cent!

Check your super

If you have multiple superannuation accounts – or have forgotten where your super is – you’re not alone. According to the Australian Taxation Office, there’s $18 billion of lost super waiting to be claimed nationally.1

Effectively managing your super is vital for building your retirement nest egg. Contact your financial adviser who may help you manage your super.  It’s also worth seeing what insurances are covered in your fund so you aren’t paying extra for cover you don’t need.

Set retirement goals

The earlier you set clear goals for your retirement, the more options you’ll have. Work out what assets you have – from your home to superannuation – and review your current spending patterns, then determine your goals for retirement and what lifestyle you’d like to enjoy. This will help you calculate how much you’ll need.

Remember, we’re now living a lot longer, which means our money may now need to last 30 years in retirement, or we may choose to work longer.  Our health is also an issue that needs consideration as we age and this too will impact our retirement years.

Create an estate plan

Estate planning involves more than writing a will. It outlines what you want done with your documents, contacts, debts, bills and assets, making the process easier for your beneficiaries after you’ve passed away.

Whatever your financial New Financial Years’ resolution may be, seeking professional advice may help you make it reality this year.

 

Note:
1 The Sydney Morning Herald, 2017, ‘Almost $18b in lost super waiting to be claimed’. Accessible at:

http://www.smh.com.au/money/super-and-funds/tax-office-holds-records-of-almost-18-billion-in-lost-super-20170920-gylo3z.html

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