A Financially Rewarding Year Ahead
New Year resolutions can be a great way to kickstart new beginnings. Staying fit, eating healthy, and travelling are all common goals that make it on New Year’s resolution lists.
However, it is your financial health that could really have a significant impact on the year ahead. The allure of a fresh start is a great time to commit to some financial goals that will have an impact now, and for many years to come.
A Clean Sweep
The past few years have had significant disturbances to people’s careers, savings and lifestyles. More than ever, people are understanding how big their emergency fund should really be and why investing for the future is essential to financial security.
While no one could have prepared for a crisis as big as a global pandemic, we can focus on what we can control - fixing any vulnerabilities identified in our finances.
Now is the time to review spending habits and outgoing / outstanding bills.
Be sure to review your general insurances and your ongoing subscriptions - the type of creep that can add up to hundreds of dollars in savings once a deeper dive has been had.
For any loans, check your current interest rate. It's as easy as looking at your online banking. There could be a more competitive rate available now. Touch base with us and we can let you know.
Check-in with a financial adviser who can help set a clear financial plan for the New Year. Depending on personal goals and an individual’s financial situation, a dedicated financial professional can help with cash flow, spending habits, tax, retirement planning and more.
Reduce the Paper
Managing debt, saving for the future, and distributing where a hard-earned salary goes can be exhausting. To free up the emotional and mental energy needed to tackle big financial goals, focus on optimisation.
Set a plan to consolidate or pay off high-interest debt. Carrying multiple balances, especially at varying interest rates can be all-consuming.
Debt consolidation - moving all or most of the debt to one place - minimizes the management to one interest rate, one minimum payment, or one repayment term.
Automate regular bills as much as possible. Set up a weekly transfer into a billing account and reduce the mental load of regular financial housekeeping, so the focus can be on bigger tasks at hand.
Be Your Own Gravy Train
One of the best investments you can make is paying yourself first, which generally means "paying" your future self money. It's important to do this first, before all other bills, because if you pay yourself last, chances are you won't pay yourself at all.
This could be additional contributions into superannuation, or regular amounts into a savings account with a specific goal in mind i.e holiday, or emergency funds before other expenses come out.
This is also a great time to future proof your career and salary. Pursue extra credentials, education or promotions that can increase or secure higher earning potential.
The stress of the past two years has emphasized how important health and wellbeing is. Taking care of your health can possibly reduce medical bills and increase the quality of life for your future self.
Set a monthly plan of investing a particular amount every month and stick with it, to ensure you’ve always paid your future self first, no matter what.
Achievement Unlocked
Setting a long-term financial goal such as investing for retirement can help you stay on track and make your money work for you. However, retirement might still be a few years away.
Set short and medium financial goals, not just long-term ones, to get the satisfaction of achievement and keep motivated.
Choose investment goals so that the final amount becomes passive income, which can snowball into other goals, to be able to achieve those sooner as well.
ROunding Up…
There’s no need to wait for a specific time of year to begin pursuing a financial goal. Every day is a chance to start fresh with your financial objectives.
If you would like additional planning or information for your New Years financial resolutions, please don’t hesitate to reach out.