How to Plan Your Best Financial Year Yet | Bell Partners

New year financial health check – everything you need to set up or review for your most financially successful year yet

As the festive season fast approaches, so does the time where many of us get that rare opportunity for quality downtime with family and friends.

As well as enjoying the celebrations this time of year brings, it’s also the time many of us will take stock of the year that was and set our goals for the year ahead – these are tips to help make it your most financially successful year yet.

Review your loans

A little overspending this time of year is common, so it’s the perfect time to have your home and other loans reviewed.

Although rates are still low, we have seen lenders begin to increase their fixed interest home loan rates during November out of cycle with the Reserve Bank. This means if you haven’t discussed fixing your home loan yet you could be fast running out of time to lock in a super low rate.

There can be restrictions and other costly fees such as break costs for this type of loan, so it’s important to talk about your plans and goals with a professional advisor, otherwise a cheap home loan rate can become a costly mistake if you need to break the contract.

It’s also a great time to look at consolidating other debt at higher interest rates onto your home loan, or getting funds ready for a pool, home renovations, a family holiday or other investments.

General insurances

General insurance covers a large range of insurances, including for your home, home contents, car and other assets. It could also extend to your business insurances and any assets your business owns or other specific risks to you want to insure against.

There are two main reasons why it’s important to have your general insurances regularly reviewed.

The first is around policy wording. Many insurance claims come unstuck for the policyholder when they realise the insurance didn’t cover what they thought it did, or when the insurer is able to avoid paying a claim because of the policy wording.

It’s important to know you are covered for what you need to be.

Secondly is price. There can be thousands of dollars in difference between different insurers for the same cover. It’s important to remember that any policy, no matter how cheap, is not worth anything if it doesn’t cover what you need it to.

A professional insurance broker will be able to assist you to get the cover you need at the best price. They are also invaluable to have on your side in the event of a claim, often having the contacts and negotiation power to get you the best outcome with the insurers.

Tax planning and budgeting

Being the mid-point of the financial year makes this the perfect time to speak with your accountant. Tax planning becomes much harder when left until June as you may not have the money or resources to put yourself in the best position for the end of the financial year on short notice.

Catching up with your accountant will allow you to check on how you are tracking with your current budget and making any necessary adjustments with time up your sleeve.

This could be around the timing of business spending or investments, to ensuring you have sufficient funds to meet any expected tax liabilities. Knowing you have a plan and are working towards it will ensure you don’t have any surprises come 1st July and the start of the new financial year.

Financial planning

If you haven’t already set your financial plans in place, now is the time to do it.

Setting proper financial plans in place now will allow you to reach your goals sooner, and give you adequate protection for those plans and goals through life insurance policies, TPD (total and permanent disability) cover and income protection.

Many don’t think about planning and protecting their financial future until it’s too late. Once these plans are set in place they can sit in your bottom draw in between regular reviews or changes to your circumstances.

If you have your financial plans and protection already in place and you haven’t had them reviewed in over 12 months (or your circumstances have changed) then it’s important to revisit them with your financial advisor.

They will make sure your plans are still relevant, that you are on track with your goals, and that the protection you have in place is adequate.

Just as you may find yourself underinsured when it comes to life insurance and income protection policies, you may also find you are over insured and paying for a level of cover you don’t need. Your planner will be able to help you get the balance right.

Wills and Estates

It’s a topic many of us don’t like to discuss, but that does not make it any less important.

When spending time with family and friends this time of year, take stock of what has changed – has there been new additions to the family? Have there been any falling-outs? Has your assets or wealth significantly changed? Have your wishes for what happens to these things if you were to pass away changed?

These are tough, hard hitting questions to ask yourself, but the idea of your loved ones not being taken care of in the manner you wished could be a tougher thought to grasp.

If you haven’t set your Will with a professional who can guide you through the process then there is no better time than now to have this discussion. As uncomfortable as it may be, the piece of mind that follows knowing your estate planning is in place far outweighs the temporary discomfort.

Alternatively if you have previously had a Will written and discussions around estate planning it is important to review them and make any necessary changes. This may be the only time all year you give these any attention before you forget about them until your next review.

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