February 06, 2017
Now that we are well into the New Year, you are likely to be in the perfect position to review your finances.
By reviewing your finances on a regular basis, you can make sure your money is working for you and your current situation.
Regardless of whether you have been putting off a financial stocktake for a while, or you simply don’t know where to start, don’t fret.
There are 4 easy steps you can take today to review your financials to ensure you are on the right track to achieving your goals and becoming financially fit.
Look at your cash flow
If you have already set yourself a cash flow budget and are using it, evaluate it to see if it reflects your current personal and financial situation – are you really saving and/or spending what you budgeted? Take into account a change of income, expenses, and debts.
If you have never set yourself a cash flow budget before, now is the perfect time to create one so you can be in better control of your finances.
When setting up your new budget, make sure you include all the money you’re receiving, as well as all of your regular spending, but also allow for those less frequent bills that are only paid annually or quarterly. Work out how much money you have left over at the end of each pay-cycle and then put this towards your savings or paying off your non-tax deductible debts. If you need help setting and tracking your cash flow budget, give us a call to discuss how we might be able to help.
Consolidate your super accounts
According to data from the Australian Taxation Office, 14.8 million Australians have a super fund account. Of those, 43% have more than one superannuation account. While this statistic is startlingly high, it is not surprising. Many people will open a new super account every time they switch jobs and, as such, end up with four, five, or even 10 different superannuation funds. As a result many Australians are spending thousands of dollars each year in unnecessary super fees.
For those who have more than one super account, it may be worth looking at consolidating your different funds. By consolidating your super funds, you will only have one account to manage and you can potentially save yourself thousands of dollars in fees and charges.
Many superannuation funds also include a default level of insurance cover, so you may be paying unnecessary insurance premiums as well.
Your financial adviser can help with identifying how to consolidate your different super funds, whilst also taking into account any insurances currently held.
Review your life insurances
Our lives are constantly changing, so it is crucial your personal insurances are relevant to your circumstances. A significant increase in debt (e.g. increasing your mortgage), a new job, the arrival of a baby, or a change in a relationship status are just some of the reasons to review your life insurance policies.
There may be coverage that needs to be added, removed, and/or increased. According to Zurich’s 2016 Global Survey: Income Protection Gaps, just 27% of Australians have income protection, and only 19% said they had a meaningful knowledge of income protection insurance. By comparison, 83% of Australians have car insurance.
With this in mind, the question must be asked: ‘are our priorities right?’ After all, the ability to earn an income is, generally speaking, our biggest asset, so it makes sense to for us to protect it.
Enlist a coach to help you achieve your goals
As with any fitness program, sometimes it’s tough to get started – and then to stay on track. That’s where a professional coach or trainer can step in to help you work out a program that’s suited to you. Better yet, your coach will regularly check in with you to make sure you continue to stick with your program and achieve the results you desire.
Your Financial Adviser can act as a ‘coach’ for your money. They can work with you to develop a plan that is tailored to your needs with a range of strategies suited to your goals and circumstances. They can also help you stay on track and fine tune your plan if necessary.
Even if you consider yourself to be financially savvy, it is always good to have an expert on hand to help get ahead faster and make your money work harder.
If you need some help getting financially fit, or you’re ready to make some bigger plans for your financial future – give us a call!