More Australians chose financial resolutions

The party season might be over, but financial anxiety can stay around long after the wrapping paper and wine bottles are gone. More Australians each New Year decide to make smart resolutions to become more financially secure.

Glenn Seaton from Baker Affleck Financial Solutions says, "That first credit card bill of the year is hard proof of all the spending we have done over the holiday season. At least this year you can take advantage of the financial ‘health check’. Putting your finances in order will not only help you get on top of your debts and save more money but also help effectively plan for the future.”

So how can you make some positive changes to your financial ‘health’ this year? Glenn has some all-year-round tips to make sure you stick to your financial resolutions:

Pay off your ‘bad debt’ on your credit card – It might be hard to do without life’s luxuries, but spending money on depreciating assets won’t increase your wealth, and it might even cost you more in the long-term.
Other bad debt – In addition to credit card debt what are the amounts of hire purchase, personal loans or other debts currently being paid off? If the total of all loans exceeds 10% of household income, you need to implement a plan to reduce them as a matter of priority.
Set up an automatic savings plan - “Have part of your pay automatically deposited into an investment, such as a managed fund, each month. Money you don’t see is a lot easier to save. This system will build up a savings pool for those unexpected emergencies and short-term goals,” says Glenn.
Implement a tax-effective investment strategy – The sooner you start a wealth creating investment plan the better, however, Glenn recommends reviewing your tax position carefully. “Some investment strategies are more tax effective than others, so it’s worthwhile getting professional advice. Investing in super, targeting Australian shares, or gearing are examples of tax-effective strategies, but whether they are suitable will depend on your individual circumstances and tax position.”
Set goals for the year ahead and longer-term. Whether you want to pay off your home, buy a new car or save for a holiday, setting goals is the first step towards achieving your dreams. Once you have goals, put a plan in place to achieve them.
Home loan review - If you're still making repayments, is it time to revisit your progress? Are you able to increase your payments or frequency of payments to save interest?
Review your superannuation. Couples can split super contributions with their spouse, which can potentially minimise tax and increase their income on retirement. Also, for retirees, Government Pensions have new limits; this might mean you can now receive the Pension if you previously could not. Whether you are near or far to retirement it is never too late to seek advice about how you can improve your position.”
Guard your assets – Despite insuring our car or home we often forget about our most valuable asset, our income. Income Protection Insurance covers up to 75% of your gross income if you are injured or ill and unable to work – plus the premiums are generally tax deductible.
Don’t “set and forget” – Once you have your savings and investment plan on track, review it at least once a year, says Glenn. “Legislation changes, world events and even marriage, divorce or redundancy can affect your investments. The New Year is a perfect time to do this to ensure your savings and investment plan stays on track.”
Ensure your will is current - Everyone has heard of the importance of making a will and keeping it up to date. Making a will itself is not particularly difficult or even terribly expensive. It is a fact of life that people get divorced, form new relationships, change old relationships, or establish new interests. Any of these may result in a will being challenged through the legal system and create long-term animosity, anger, resentment, and considerable delay in finalising the estate. Estate planning matters should be regularly reviewed in addition to your will.

For the month of January, Baker Affleck Financial Solutions is offering all clients a Free Financial Health Check to the value of $330 For more information, call us and ask for Glenn, Jennifer or Deb.