Another year has passed, which means it is time to start reviewing all the resolutions we made in 2016 and look forward to our goals for 2017 and beyond. Some of us may have met the goals we set for ourselves, others may have given up within a week. Either way, a new year means a fresh start and an opportunity to consider what we want to achieve this year whether it be in the space of health, lifestyle, work or finance.
Financial goals are important to set and while you may encounter setbacks along the way to reaching the goal, it is worth getting into the habit of making these goals and readjusting them as circumstances change.
Here’s four financial resolutions you should consider to kick-start your New Year.
Review your superannuation
As the superannuation environment coming into effect from 1 July 2017 demonstrate, it’s important to start building your superannuation balance early in life and keep on top of changes. Taking an interest in your superannuation from an early stage can have a noticeable impact on your balance at retirement and thereby your lifestyle during retirement.
The new year is also a good time to review your superannuation circumstances. Do you have a number of accounts from previous employment? What fees are being charged on your account? How is the money invested? Is there enough money and time to consider self-managed super? Do you have insurance cover in the account? Over time, the answers to these questions can have a significant impact on your balance at retirement so it’s imperative to be aware of exactly what you have and what you are paying for.
The Resolution: Review my existing superannuation accounts
Saving for a purchase
Saving for any financial goal can be a daunting process, whether it be saving for a new house or car, a holiday, the kid’s school fees, or even the renovations you have been putting off.
Creating an end goal and deadline is important, but setting smaller goals and rewarding yourself along the way is essential to achieving your core objective. Set your goal too big and you may become overwhelmed, but breaking the goal into monthly, quarterly or annual targets will create momentum which can help you to keep motivated along the way.
The Resolution: Set myself a big picture saving goal with smaller targets and rewards to reach along the way.
Learning to manage and understand your own finances
Having an understanding of what your personal financial situation is and knowing how your finances are managed is a life skill that many neglect to nurture.
Some couples may allow one person to manage and run the finances for the household and the other party may have a limited understanding of where money is invested, how it is dealt with or even how much they have. Unexpected life events can leave those who have not been involved feeling daunted by the prospect of having to get a hold on their financial position, often in a short-space of time.
Challenge yourself to ask questions about your finances, attend meetings with your financial adviser, consider what would happen if you found yourself in a position where you were looking after your financial position on your own and understand where and why your financial circumstances are in the position they are now.
The Resolution: Take the initiative to understand and be a part of managing my financial circumstances.
Review my insurance situation
Most of us will have a lot of different insurance policies, such as house and/or contents, landlord, vehicle, health, life and income protection policies. However many of us also consider insurance to be something to ‘set and forget’. Insurance companies can also take advantage of this attitude by increasing premiums or making better offers to new customers, so shopping around now and then can be of benefit, even if no changes are required.
It is useful to review your insurance position now and then. For some things you may be over-insured with coverage or even policies you no longer need, but for other things you may not have enough insurance. If you have recently achieved a savings goal and bought a house, have you also taken income and life insurance so that the loan is covered for the family if something happens?
The Resolution: Undertake a review of existing insurance policies and whether any new ones should be considered.
The Accru Wealth Management team is licensed to assist in each of these areas and may be able to assist you in achieving your financial goals and resolutions. Our team is client focused, provides holistic advice, and is available for a free initial consultation to discuss these objectives.
Kate Rhodes, Accru Melbourne