The new year sees many people reflecting on the past year and thinking about new year’s resolutions. Similarly, the beginning of a new year is the ideal time for setting financial goals, and here are four practical ways you can kick your year off to a great start.
- Decide what you want to achieve financially. January is perfect for taking stock of where you are at, particularly as those post-December bills start rolling in. So perhaps you would like to start by reducing debt or commencing a savings plan for a new car or family holiday. The main thing is to be decisive and put a plan in place.
- Setting a realistic household budget will provide a good understanding of your finances and identify areas of unnecessary spending. This will not only assist in balancing your income and expenses but will help you clear debt and allocate money towards bigger picture items and help you achieve your financial goals
- Tidy up your filing cabinet. According to the Australian Taxation Office, you should keep financial records for five years. Shred financial paperwork older than five years and file everything else, including bills, invoices and bank statements. Remember that any filing system you implement should be quickly and easily maintained so you’re motivated to keep your records in order.
- Review your paperwork; start with insurances – life insurance, house, car etc. Are they current and are you adequately covered? Insurance premiums have increased substantially, are your premiums appropriate for your level of cover?
Assess your superannuation and nomination of beneficiary. Is your will and estate plans up to date or have your circumstances changed?
With interest rates on the rise, do a few sums and work out whether you are getting the best deal on your mortgage. Perhaps it’s time to renegotiate with your lender!
While the idea of setting a new year’s resolution is common, sticking to resolutions and accomplishing them are less so.
The key to achieving any goal is to be SMART about it:
- S – be Specific. Clearly define your goal.
- M – ensure its Measurable so you know when you’ve achieved it.
- A – make it Achievable. Planning to complete a marathon in February may not be achievable if you’ve never run before.
- R – be Realistic; could you really lose 20 kilos in a month?
- T –set a time by which you want to achieve your goal.
If you’re not sure where to start, Christine Swanson is one of Australia’s most recognised financial advisers and can help you put processes in place to get your SMART goals underway.
With a little planning and organisation, being clear about what you want to achieve, and mapping out how and by when you expect to achieve it, you’ll be giving yourself the best possible start to a successful year.
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