The tax department isn’t on your tail to submit your tax return, but the end of calendar year is fast approaching and it’s a great time to get your finances in order to ensure you start the new year on the right foot.
December is a great month to take stock of how your finances have fared in the past calendar year and set your intentions for the year ahead.
Before you shut the laptop and embark on celebration and relaxation, consider completing these basic financial tasks to keep your finances on track.
Calculate your costs
It is no secret that the cost of living is on the increase lately, with inflationary pressure extending to upticks in interest rates also.
Before you grab your Santa hat, spend an afternoon running through your standing expenses to calculate how much you are spending on the basics such as:
- Mortgage costs and debt repayments
- Set bills such as utilities and other recurring fees and charges
- Discretionary expenditure.
If possible, contact your financial institution and/or your various providers to negotiate a better rate for your home loan or your health insurance or electricity bill.
Take advantage of any Christmas discounts available from utility providers or telecommunications companies.
Add all of your standing expenses together and keep the figure in the back of your mind so that you know what your outgoings are coming into the new year, taking into account where costs may increase for things like school fees or insurance premiums.
Calculate your income
You already know how much you earn, right?
The dollar value of your gross salary is probably firm in your mind, but that’s not the figure you take home each fortnight.
Sit down and work out your net income for the year ahead, taking into account possible pay rises or reductions if you are reducing working hours or changing jobs.
Consider the amount you are contributing to your superannuation and, if you feel it’s too conservative, chat to your financial adviser about a plan for increasing your superannuation contributions.
Go back to the figure you calculated for your expenses and deduct that from your net income and take stock of how this difference looks.
Are there places where you can cut spending for a more fruitful financial outcome next year?
Emergency fund check-up
Have you got savings put away for a rainy day?
The holiday period often convinces us to throw caution to the wind when it comes to spending and to do this, many dip into their savings accounts.
Use your review of your expenses to determine how much you can afford to save and set up a direct deposit into your savings account to kick off the new year.
If you’re an experienced saver, review the amount you’re putting away and decide if you can up this in the new year to kick your savings into a higher gear.
Set some financial goals
Armed with a financial overview, contact your financial adviser to set some financial goals for the year ahead.
Is this year the year you add another property to your portfolio?
Is it time you got serious about superannuation or a self-managed superannuation fund?
Talk to your financial adviser about the incremental steps you can take to build your wealth and safeguard your financial future.
At First Financial, we offer all the services traditional financial planners offer, except that we do things a little differently.
These differences mean we can maximise your financial success and help you enjoy today – and retire life ready, certain you have enough.
Contact our team today.
