My New Financial Year Resolutions

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My New year resolutions

 

With the end of another Financial Year behind us, is it time to consider a fresh start?

We have all made the usual New Year commitments in January around eating less, doing more exercise etc. with varying degrees of success.

I all too often see clients who are a complete shambles when it comes to things “Financial” and suggest that a few New Year’s resolutions around your financial life could be in order.

Here are our 5 New Year’s resolutions that are easy to implement and will make you a lot healthier financially.

Your 1st resolution –
“I will finally get my budgeting in order”

I so often meet clients who used to care about money. What is unusual is that as we earn more than we need to live on (Remember starting out, mortgage, baby, one income etc..?) we seem to place less emphasis on how and what we spend our discretionary income on. This sounds crazy but the reality is that very few of us ensure that we get the maximum value from our incomes.

It’s time to commit to building a simple budget. Whilst there are lots of programs out there (And costing up to $6,000 per annum) a simple excel spreadsheet will help you start identifying where all your money goes.

If you can’t see yourself creating a simple budget, think about this. It’s not flash new TV’s, Cars or a big new fridge that takes large chunks of our income. It’s the $2 expenses that take most of it (After all what do we really have to show for the Tens or Hundreds of Thousands of Dollars in income we have received) and we invariably have nothing to show for it. If nothing else think about whether or not you need that $4 take away coffee, rather than waiting until you get to the office for one.

 Your 2nd resolution –
“I will get my Superannuation sorted out”

The average Australian worker has 2 or more Superannuation funds. Despite knowing that you should get around to this, it seems an insurmountable challenge that always gets pushed to the back burner. The best thing is that we are there to help you. Just drop us an email and we will get the ball rolling for you.

Your 3rd resolution –
“I will get some Financial Advice”

In the same way we visit a GP when we aren’t feeling well, why not seek advice and guidance on your personal financial position before it starts looking a bit grim. Going DIY on how to best plan for your future goals, ensure you have sufficient cover in place for you and your families security, get the most out of Superannuation, ensure you qualify for any freebies from the Government (Co Contributions and Spouse contribution rebates) …. the list is almost endless!

Most people feel that they don’t know enough about all of this to get it sorted out. A professional financial planner will assist you in discovering what is important to you, rating those issues according to your personal need and goals and then assisting you in implementing the necessary steps to ensure that your own financial health is in tip top shape.

Your 4th resolution –
“I will maximise my retirement benefits”

The Maximum Deductible Contribution limits have increased for those over the age of 49 to $35,000 per annum. Are you doing all you can to ensure that your Superannuation contributions are being maximised? Would a Transition to Retirement Strategy help you fund the additional contributions?

It’s not as difficult as it sounds and it will make for a more comfortable retirement. A call to your financial planner is all it takes to understand your choices and get the ball rolling.

Your 5th resolution –
“I will make my money work as hard for me as I work for it”

It’s an endless cycle. We go to work, get paid, put the money in the bank, pay the bills, go to work, get paid, put the money in the bank, pay the bills … You get what I am talking about.

Try thinking about how you can make your money work as hard for you as you work for it!

Are you maximizing your offset mortgage arrangements, are you paying your credit card on time so as to avoid interest costs. Again the list can appear endless. Spare a thought for this simple chore. I personally check my credit card bill against my receipts once a month. (You can do it on a much more regular basis if you have online access) On almost every statement I find errors. From doubling up on the same charge because the store sales person didn’t realise the amount had gone through (We have found this often with our local Supermarket) through to bogus charges that I have never authorised or interest costs incorrectly applied by the bank. It adds up to many hundreds of dollars a year.

The bottom line:

The one thing most of us share is a lack of understanding about most of the financial aspects of our lives. Seek advice from a reputable financial planner. In my honest experience (And I know I have a vested interest) It is money well spent.

All the very best for the 14-15 financial year.

Anthony Stedman CFP
LifeTime Financial Group.
An independently owned Melbourne based Financial Planning Group