New year, new me

RAJ LADHER

Now 2018 is here it’s a great time to start the year with a financial tidy-up

New year-new me! It’s a phrase used by many of us at this time of year. A time to make plans for the coming year. Whether it be family, health or finance, having a plan and monitoring progress will give you a higher chance of success. Here’s a few tips on being a little more finance savvy for 2018.

tip #1. Understand your financial position: download a budget planner from the internet and enter all of your income and outgoings. This will allow you to identify where your expenses are going and prioritise. (www – good budget planner – identifies good expenses from bad)

tip #2. Have a budget: once you understand your financial position, create a budget. For example, if you are saving for a deposit for a home, allow for this within the budget and try and reduce some other negotiable expenses such as entertainment.

tip #3. Monitor your progress: monitoring progress is equally important as setting a budget. Check monthly, quarterly and half-yearly to see how realistic your budget is in comparison to your actual spending. ‘Insanity: doing the same thing over and over again and expecting different results.’ Albert Einstein.  

tip #4. Check your rates: pull out your statements and check your interest rates on all your outstanding liabilities – home loan, personal loan, credit cards etc. Many of us pay ‘lazy tax’, i.e. an unnecessary premium on a liabilities where we can’t be bothered to move providers.

tip #5. Restructure your liabilities: having checked your rates on your liabilities, go online or check with a finance consultant on how all your debts are structured. You may have some bad debt, i.e. credit cards which you could consolidate into your home loan. Consider restructuring – it’s not as simple as raising $30,000 for example to pay off a high-interest paying credit card – this could potentially lead to paying even more interest over the mortgage term.

tip #6. Personal insurances: make sure all your personal insurances are up to date and that you are still paying a competitive premium. Insurances such as life, trauma, income protection, home and contents are all very important, especially if you have debts such as a mortgage. Premiums can fluctuate along with your circumstances, i.e. turning from a smoker to a non-smoker can reduce your premium.

tip #7. Check your Super: for many of us, we are not planning on accessing our super for a number of years so it’s too far in the distant future to think about this now. However, this is the time to make small changes in order give more time for your super to grow. Close to 10% of our hard-earned salary goes into this, so make sure it’s working for you. Speaking with a financial planner could pay dividends in the future.  

tip #8. Pay rise: when was the last time you got a pay rise? If you are going above and beyond your normal duties, are you being rewarded for this? Pay rises aren’t just handed out, so if you feel that you deserve a pay rise, have a discussion with management. You may get some feedback on what you could do for a pay rise in the future.  

tip #9. Use a professional: with the amount of information online, you can do most of the above yourself. However, information online can be conflicting at times which can be confusing. Using a finance professional such as an accountant for tax returns, a mortgage expert for restructuring and a financial planner for advice on your superannuation and risk-based policies could save you a significant amount of money and time.

Turning these tips into habits could get you on the path to financial success. While not an easy task, making a few changes and sacrifices can make a difference to your financial well-being.

Good Luck and have a great 2018. _____________________________________________________________                  Raj Ladher from Tomorrow Finance is a mortgage expert with over 11 years’ experience both in the UK and Australian mortgage markets. Accredited with the Mortgage and Finance Association of Australia (MFAA) and access to numerous lenders, Raj specialises in all types of mortgages, from first homeowners to investors increasing their portfolio. For more, email raj@tomorrowfinance.com.au

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