July 01, 2013
Welcome to a new financial year. I read an interesting article this morning which I'm borrowing from for this week's blog. Source article is reference below. I've copied, pasted, paraphrased and added my own touches. Time to set yourself up for a bumper financial year (and for years to come).
1. SAVINGS A little money tucked away for a rainy day is often the last thing people think to do after the debts, the bills and the bustle of life. However, setting up a safety net or emergency fund may be the best financial move you ever make. Why not put this extra cash into your home loan? Extra repayments of only $20 per week can give you a 4-5 year saving on a loan of $250,000. Why not let the power of compound interest work for you, just like the banks do? For the cost of a cup of coffee per day you can make serious savings. The best thing is the extra funds can be accessed via a "redraw" facility. If your loan doesn't allow this it's time for a home loan health check.
2. HOUSEHOLD BUDGET I know, I know - most people hate the idea and very few people actually have a budget however it's essential to good financial planning. Only businesses with a solid and achievable budget truly flourish, so why wouldn't it work for you? Adam Niewidok from Mortgage Choice Financial Planning offers a budgeting service to all his clients. A budget is the start of big things. Why not give Adam a call on 02 9525 9988 for a free, no obligation chat or meeting?
3. DEBT While we are enjoying record low home loan interest rates, credit card and short-term personal loans are still expensive. Allocate as much spare money each week to repay the most expensive debts first. The debt is usually for things such as personal loans, furniture and credit cards. Then tackle the next most expensive debt the same way. However, make sure you don't leave yourself short of cash or unable to keep up with any other regular repayments. It may be possible to consolidate these expensive debts into your home loan. Keeping up the higher repayments is a sure fire debt-killer. It's time for a home loan health check! Not only could you save money on your home loan, but on everything. Lenders are constantly improving their products too, so some of these new features may really help you achieve your goals.
4. INSURANCE Building and content insurance should always be "replacement value" not sum insured, says the source article."The single most sensible thing you can do when it comes to insurance is to switch to a policy that is replacement value, not sum insured, because you can almost guarantee that the sum insured will be a lower amount and you will be left out of pocket,".Replacement value means if your house is burnt down it will be replaced regardless of cost. Also, don't leave your family unable to cope financially if you die or become seriously ill or disabled. Life and disability insurance can cost as little as a few dollars a week for enough money to pay off all your debts and leave them money to invest and provide a small income. Adam Niewidok from Mortgage Choice Financial Planning says asset and family protection is the cornerstone of any good financial plan. It is necessary.
5. INVESTMENTS AND SUPER Revisit your investment strategy: is it still taking you in the right direction? Why not take this opportunity to review your investments? Consider estate planning in your long-term strategy, including super beneficiaries. There may be other suitable things you can do, like salary sacrifice into super. This may not suit all people as you won't be able to get your hands on the cash until you retire, so again speak with a good financial planner.
Mortgage Choice Financial Planning, Adam Niewidok, is an expert in all things financial planning from Budgeting through to Transition to Retirements plans. Think a financial planner is too expensive or "overkill" for your situation? It's not. MCFP offer a menu of services so you, the client, only pays for what you want. For example you will not be charged for a full financial plan if you only want to discuss your budget. Why not call Adam on 02 9525 9988 to arrange a free, no obligation meeting?
As always, if there is anything Mortgage Choiuce at Gymea can do for you please feel free to give us a call on 02 9525 4544. We'd love to help make this financial year the start of something massive for you.
(Thanks to the original source article which can be found http://www.perthnow.com.au/money/superannuation/simple-steps-to-wealthier-new-year/story-fnhld7l8-1226672356726 )