As we are at the start of a New Year, many people and families review their financial position and might make ‘New Year Resolutions’. You might have already decided on some financial objectives that you would like to achieve this year.
As there are so many areas of finance, it can be overwhelming to review every area of your finances. Here is a short list of suggestions that might help you choose some areas that you would like to review or make a change in.
- Time to review your debt arrangements. Is your debt structured appropriately for you? Does it need a review? Do you have deductible debt and non-deductible debt? If so, are you reducing your non-deductible debt as a priority over deductible debt? Have you got outstanding credit card debts? If so, is it worth reviewing a personal loan or a credit card with a lower interest rate? Do you have the capacity to increase your repayments to your debts?
- Time to review your estate planning. Do you have a Will? If not, why not? If you do, how old is it and will it still be relevant? Is your superannuation beneficiary up to date? Have you had a recent change in circumstances?
- Time to review your personal insurances. If you have a family, are you adequately covered if an unforeseen event happens to you or your partner? Whether you have a family or not, is your income insured? If you have income protection, is the waiting period appropriate and is the amount insured up to date with what you are earning?
- Time to review your investments. How long has it been since you reviewed your investments, be they shares, property, managed funds or within your super fund. Do they reflect what you want to achieve over the coming 12 months? Are they structured appropriately?
- Time to review your cashflow. Many people revisit their expenses budgets for the start of a new year. Not exactly an exciting thing to do; however, to some people it provides a sense of relief that you know where you are heading. Are there any avenues to accelerate the repayment of debt, increase money into investments or increase money into superannuation? Are there options to pay less tax? If you are reviewing expenses, why not use our budget calculator.
So there are a few technical topics that you can review that might make a difference to your financial life. As you know, there is an abundance of information in our modules on all of the questions posed. So if you are unsure of anything or would like to know more, please go to the relevant module or simply contact us.
One more quick strategy for credit card debt. If you are paying an interest rate of around 20%pa on outstanding debts on a credit card, there are many credit cards that give you low rates if you transfer the balance to the new card, rates even as low as 3 or 4%. On a $10,000 debt, changing cards may save you up to $1,700pa. Be careful, one catch is not to spend more money on the new card, as any repayments that you then make to this card pays of the low interest rate debt first – leaving the new debt with the high interest rate.
It is best to do your research and also compare things like credit card fees.