With the New Year here, it’s the perfect time for you to start thinking about your finances. This could involve creating a new budget, re-evaluating your spending habits, consolidating debt or simply planning for the year ahead.
In saying this, there’s nothing more daunting than establishing your New Year’s financial resolution, and many people often fail to meet these goals. Luckily, here are some achievable and realistic financial goals to help you get started on your journey!
Calculate Your Net Worth
One of the most important aspects of reviewing your finances for the New Year begins with a calculation of your net worth. This is a key step to maintaining your financial health and tracking your progress against set goals. By examining all your assets and liabilities, you can get a better idea of where you should prioritise your spending and saving. It’s also crucial that you re-calculate this figure every year to reach your goals, prepare for any unexpected circumstances, and avoid any overwhelming debts.
Pick the Best Financial Strategy
It’s also a good idea to select some items from your financial portfolio (whether they be a credit card, mortgage, superannuation, insurance, investments, etc.) and conduct detailed research to find out whether you’re actually getting the best possible deal. For each of your accounts, you should be regularly checking your interest rates, fees and risk profiles every few years. High compound interest rates are ideal, yet higher fees and costs can reduce your wealth over time. That’s why re-evaluating your investments and monitoring your progress is essential.
Review Your Credit Report
You should always check your credit report regularly and find specific areas for improvement. A poor credit report and credit rating can adversely impact your ability to save because you may need to pay higher interest rates for your loans, which reduces your disposable income. To get a credit report in Australia, you can contact the three main credit reporting agencies – Equifax, Experian or Illion, which requires proper identification. Keep in mind that you’re only entitled to one free copy every 12 months.
If you need help with planning your finances for the New Year ahead, then don’t hesitate to contact our brokers. We will pick the best options to suit your financial resolutions.