After a very busy year, the Christmas New Year break is generally the best time for families to review their financial situation. Time seems to pass so quickly, particularly once we are back to work after the break.
Pay yourself first
Did you manage to save anything this year or are you are constantly counting on this month’s income to pay last month’s bills? Do you spend first and hope to save what’s left?
Instead of making saving an afterthought, pay yourself first and allocate a percentage of your income to a regular savings plan. Setting up a weekly or monthly direct debit will remove temptation and encourage you to live within your means.
Review your mortgage
If you have a mortgage this is likely to be your biggest monthly expense so it’s a good idea to check your progress at least once a year.
Go online and compare interest rates. If your rate is no longer competitive ring your lender to negotiate a better deal and consider switching loans if they won’t budge. Just beware of any exit fees.
Negotiate better deals
Your home loan is not the only expense worth haggling over. These days if you want to get the best deal on your electricity, phone, internet or insurance you need to ask. Before you do, ensure you understand what your current plan/policy covers and research what’s on offer elsewhere.
Check your super
Do you know how your superannuation is invested? When you retire superannuation is likely to be your biggest asset outside the family home, yet almost one in four Australians don’t know which risk profile their super is invested in.i This can cost you thousands of dollars in retirement savings and takes only minutes to correct.
As an example, a 25-year-old woman on $80,000 in a conservative option until she’s 70 could improve her retirement balance by $294,000 if she switched to a risk profile more in keeping with her age and circumstances.i
Should you require further assistance please feel free to contact Peter Quinn on 02 9580 9166.
i MLC Wealth Sentiment Survey, 5 April 2018.