Financial Housekeeping

Maintenance and ongoing ‘housekeeping’ is the key to meeting your financial goals. Here are a few general suggestions of ways you might be able to put yourself in a better financial position:

• Mortgage If you have a mortgage, it’s probably your largest monthly outgoing. Check in every year to ensure you are not paying a higher interest rate than you have to and ask your bank for a better deal. The difference in repayments for a $400,000 25-year loan at 5.7 per cent and 4.7 per cent, is more than $200 a month. Also, ensure that your loan is still right for your circumstances: offset accounts, redraw, interest-only and lines of credit are valuable features, but only if you use them. If you’re confused about what’s best, contact us for a complimentary review.
• Savings If you haven’t bought a home – and you want to this year – you’ll need to save for your deposit. Have a look at your savings plan- Assess it honestly and make a plan. Small, regular deposits can work better than occasional lump sums for some people; a separate savings account might be better than using your daily transaction account; high interest and no/low fees make a real difference; and making a luxury-sacrifice to your savings is always effective.
• Income Financial housekeeping has to include your earnings. If you want to earn more this year than last, you have to work out what needs to change: do you need new skills? A new qualification? A new employer? A new industry? Do you need to start your own business? Maybe you can schedule a chat with your employer and make your case for a pay rise?
• Costs Most households can find simple savings, ranging from mobile phone plans and electricity usage to reducing subscription services or a reduction in the eating-out budget. Many small cuts can add up to a large saving at the end of the year, giving you more options with your income. The great thing about cutting costs? It can be as large as a pay-rise, but it’s tax-free.
• Super Make an audit of your superannuation fund(s) and assess whether your current contributions are sufficient for retirement. Use the online calculators to see how you can boost retirement savings by putting in your own contributions; use the comparison sites to see what your fees cost you – they range from 0.7 per cent of your balance to around 2.0 per cent, and this is a big difference over 20-30 years. Outsource the hard work to a professional such as a Financial Adviser who can look after the review and analysis process for you.
• Control debt Are you being smart about your debts? High-interest debt just compounds against you, so doing nothing will just make things worse. Make a plan to pay off the debt, starting with the most expensive. Make a schedule and stick to it.

Addressing your finances regularly and comprehensively will set you up for financial success. If there is anything we can do to support you, please contact us.

*This information is general in nature and does not take into consideration your individual circumstances. Please contact us for further information.