The start of a new year is an ideal opportunity to give your finances a makeover. Regardless of whether you are a young wealth accumulator saving for a house, a single or double income family educating children and slogging away at your mortgage, or a retiree slowing down to enjoy the simpler things in life, everyone can benefit from a refresh of their financial and lifestyle goals.

Here are our tips for invigorating your plans for the 2015 year.

1)    Decide on the lifestyle goals you want to achieve this year

Before you plan anything else, it’s most important to plan out what you personally want to achieve for the year. Be it a new house, holidays, car or even just a small renovation to your home, setting clear lifestyle goals can be the key to driving your finances. After all, there is no point slogging away at a savings plan or sacrificing short term if there is no end goal in mind.

2)    Revisit your budget

It is often said that consumers devote about two-thirds of their income on 3 key items: food, housing and transport. Then you have debts to service, savings, household costs and optional items such as entertainment. Ensuring that your budget is clear and accurate is the best way to plan for the year. Be honest with yourself, there is no point working with a budget that doesn’t correlate with your actual spending.

 3)    Review your insurances

Frequently, people buy insurance (house, life, income protection, car etc) and they rarely revisit the policies. It’s important to review your insurance every twelve months and consider these key questions:

• Do I need this level of cover? Could I replace my income or asset with the policy I have?
• Could I reduce the cover? I.e. if you have cleared debts or sold assets during the year, you may not need as much cover as you have.
• Have you reviewed your current insurer versus others in the market. Insurance prices do move constantly, and you may save money by looking around. Just a tip from us – if you are replacing a policy make sure it is like for like (i.e. the same policy).

4). Consider adding small regular amounts to your superannuation.
This is important no matter what your age. Superannuation funds will accept as little as $50 per month, and over the course of your working life (with indexation applied) this could amount to over $30,000 extra in your superannuation fund. In addition to this, your accountant can talk to you about the taxation benefits of using a salary sacrifice strategy.

5) Review payments of Deductible versus Non-Deductible debts

Not all debt is bad, in fact some debts can be very advantageous – particularly if you are on a higher income bracket. Take a look at your debt levels and examine the rate of payments on your debts and think about whether you can accelerate non tax-deductible debt (i.e. credit cards, personal loans or home loans), and pause or maintain minimum payments for deductible debts such as investment properties or margin loans.

6) Track and review account statements.

Holidays are a perfect time to check your account statements. Double check your credit card, home loan, and bank-account and superannuation statements for any erroneous transactions or errant fees. You may be surprised by what you find.

7) Review your superannuation

By Christmas you should have received your super fund’s annual statement. It contains a lot of valuable information, so rather than tossing it straight into the bottom drawer, check the details. Understandably for a lot of people, it feels as though it will be a long time before you will need to access your retirement savings but this is not an excuse for letting your super sit idle in the eclectic potpourri balance fund. Take the time to review your account and consider such questions as:

• Are my employer contributions being made to my account?
• Are my funds invested or going into cash?
• What are the fees on my account? Is there an admin fee, contribution fee, insurance fee, exit fee, management fee, MER or a super trustee fee?
• Are there insurances attached that are a double-up on cover you already have elsewhere, or do you need to increase this cover due to new debt or financial dependents?

8) Go and see a non-aligned financial adviser

An adviser will help you work through your objectives and create a plan as to how to meet these goals. Advisers are people just like you and understand your desire to achieve those milestones in life. Seeking the advice of an adviser with no affiliations with banks or insurance companies ensures that you will receive conflict-free advice. In many cases, (such as with our firm) the first appointment bears no cost to the client.

If you would like to book an obligation free first appointment to see one of our Advisers, please phone our office on 03 9999 7200 or contact us here

All information provided in this newsletter is of a general nature only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.