A New Year is your clean slate – often seen as a time for making lifestyle changes. However, it is also an opportune time to reflect on your financial health.

2022, it has to be better than the last two years, right? With everything that has been going on the last two years, you may have not had the time or motivation to get your financial affairs in order. With a fresh new year comes a new opportunity to get your finances in order and feel comfortable you are on track to reach your long-term financial goals. 

Review Your Budget

The Christmas hangover usually finds us in a poor financial position. We over-ate, over-partied and over-spent through December. January is a great time to get everything back on track.  Starting with paying off any extra debt accumulated over the past month. 

Take this time to review (or establish) your household budget. Make sure you make good use of any excesses you can find by directing them to paying off debt or investing tax effectively.

You may have been living on a more frugal budget the last two years if you have had a downturn in employment due to COVID, and your expenses may have decreased as we have not been able to travel, eat out, participate in sports and hobbies. Your income and expenses going forward are likely to change. Have you factored these in?

Don’t waste a pay increase

If you are some of the lucky few to secure a pay increase recently, it may come into effect in the new year. There are opportunities to save more while maintaining the lifestyle you’ve become accustomed to. One of the most tax-effective investments is making additional concessional contributions into your super. Using your before-tax pay, it’s usually taxed at just 15 per cent instead of your marginal tax rate.

Check your insurance

1st January is an easy date to remember to check your insurances. Make it an annual event. 

Your financial situation is continually changing. Your income, expenses and needs change from year to year. You may have paid down your mortgage, your kids may have moved out or you may have had a new addition.

A structured review of your insurances makes sure you are properly covered or conversely you are not paying for cover you no longer need. 

This is also true of your general insurances. Did you buy that watch or piece of jewellery over Christmas? Have you reviewed your contents insurance to make sure you are covered for it? 

Time to get your superannuation on track

With many people predicted to have more than 10 jobs in their lifetime, having a super fund that can move with you from job to job and into retirement has never been more important. After all, losing track of just one super fund can cost you thousands in retirement.

Once find the fund that best suits your investment profile and insurance needs with fees you are comfortable with – it’s often a good idea to stick with it. This gives you peace of mind throughout your working life that your retirement savings won’t get lost and you won’t be paying unnecessary tax and fees when the time finally comes to retire.

A Financial Adviser can talk you through some superannuation fund choices and how to go about consolidating your superannuation accounts to take advantage of the benefits of having one, rather than multiple accounts. We also talk to you about the benefit of having multiple accounts – it doesn’t suit everyone, but there are a few that are better off with more than one super fund, under the right conditions.

Need a Hand? 

If you need some assistance with your superannuation, personal insurances, or your household budget? Contact us to organise a No Obligation Discovery Call. 

Discovery Wealth Advisers

Author Discovery Wealth Advisers

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