It’s September, the traditional time for an annual spring clean. This September, why not extend your spring cleaning beyond the usual home and garden, and take on your personal finances as well? Step One: Review your financial goals. Are you are on track to achieving them? Perhaps your goal was to pay off your credit card or increase your mortgage payments. If you aren’t as close to your goals as you had hoped, don’t be discouraged. Instead, work out where you are veering off course and the steps you need to take to get back on track. If you’re happy with your progress, you might like to think about whether you could reach your goals faster. And if you’ve reached your goals, then now’s the time to set some new ones. Short, medium and long-term financial goals will keep you on track. Step Two: Create a plan that helps you reach your goals. No matter how much money you earn, everyone can benefit from a plan. Make a list of what’s coming in and what’s going out. If you don’t have a surplus after you’ve paid for all your expenses, it’s time to make some adjustments to your spending or increase your income. If you do have a surplus, then make sure that money is going towards those goals you had set.
- If you’ve got debt, prioritise paying that off. Debt that is high-interest ie; the unpaid credit cards and hire purchase agreements that have gone beyond the interest-free period.
- Got a mortgage? Find out whether you can increase your repayments to become freehold sooner. If you’re on a floating rate you can make changes anytime, but if you’re on a fixed rate you’ll need to wait until your term is coming to an end to avoid any penalties for paying too much.
- Find your insurance policies. Are they still relevant and meeting your needs? If you’ve had significant changes in the last 12 months, chances are your insurances will need to be updated. Have you moved houses? Bought a new car? Have you had children or have your children left home? Perhaps you’ve started or ended a significant relationship.
- If you haven’t saved up an emergency fund, then make it a goal to save one up. Savings worth three months of expenses can help you get through the initial stages when an unexpected change happens to your financial situation or lifestyle.
Step Three: Get prepared for the future. Make sure you’ve got something planned for your retirement; whether that’s checking that you’re in the right KiwiSaver fund for your life stage or joining a different retirement scheme. The sooner you start to save the more likely you’ll have the lifestyle you want when you stop working. ISN has independent information and tools to help you to give your finances a good dust off and polish. Use our Wealth Technologies software planner to get started and make sure you achieve the things you want in life. Call us now and book your FREE consultation 0800 66 66 78.