Start of the Year Review Checklist

The start of the new year presents the perfect opportunity to review your lifestyle needs and financial position. A lot can change in one year as 2020 undoubtedly showed us, so it is imperative that you are constantly reviewing your goals and objectives to ensure you are in the best position to achieve them. As a guide to help you on your way, we have created a checklist highlighting important elements that should be looked over annually.

Review your Protection Strategy

Ensuring that you are protected in an unfortunate event is crucial to the livelihood of your family. While you may already have insurance policies in place, it is important you review the suitability of your coverage to make sure it meets your personal needs without being too much of a burden to your budget. Situations such as taking out a new loan, getting married or having a baby may result in your previous insurance policies not providing sufficient cover for your new needs. Additionally, you may be over insured if you pay off your outstanding loans or transition into retirement. As such, significant milestones should result in a review of insurance policies to make sure they are still up to date and working for you rather then against.

Review your Investment & Superannuation Strategy

Whether you are investing in real-estate, stocks, or bonds, it is important that you are evaluating the performance of your investment strategy to determine if it should be maintained or altered to suit your needs. This could be as simple as reviewing the income your investments have yielded over a period of time or assessing the growth of your investment. If an investment has been consistently preforming poorly, you could seek to reduce that investment from your portfolio and likewise, look to boost investments that have seen positive performance. It is essential to note that when reviewing your investment strategy, you should centre your strategy around your risk tolerance and objectives. If you see yourself as a conservative investor, your investment strategy and subsequent investments should also reflect this. Is your superannuation in the best shape?

Review or update Estate Planning

While your estate planning may not need to be reviewed as much as your insurance or investment strategies, it still should be regularly checked to ensure it is up to date. Milestones such a marriage and the birth of a child should constitute updates to your estate planning so it can remain relevant to your current circumstances. Additionally, if you have neglected to set up any estate planning in the past for one reason or another, the start of the year is the perfect time to get your affairs in order.

GOALS AND OBJECTIVES

Your goals should be at the centre of your strategic planning, therefore it is crucial that these are being periodically reviewed and modified to fit your financial and lifestyle needs. Assessing your goals is a great way to ensure to you are on the right track to achieving them and they don’t become a distant memory.

Below is a list of tips you could use to create meaningful and achievable goals going forward:

1. Put your goals in writing, on paper, rather than screen:

This makes the goals tangible and gives you a better mindset to achieving them.

2. Write your goals down every day:

Repetition will held implant the goals in your mind and so you don’t lose track of them.

3. Include a crazy goal that scares you:

It is harmless to dream! Pushing yourself to get out of your comfort zone is a great way to boost mental health and personal development. Who knows, you may achieve something you never thought you could of.

4. Make it visual:

Put your goals into visual form such as a mind map or a white board. Putting effort into your goals will give you a better opportunity to achieve them.

5. Include personal AND financial goals on your list:

Ensure your goals not only they align with your financial aspirations but also your personal values. Remember that financial goals shouldn’t be the only goals in your life.

Create a meaningful budget

While creating a budget may seem trivial, it is effective in helping you manage your cash more efficiently. This could be in the form of having specific funds allocated to different types of expenses and savings accounts. By doing this, you know exactly how your money is being spent and saved which makes it easier to manage and adjust to suit your financial and personal needs.

Review your Loan Repayments

Credit Card and personal loans tend to have higher interest rates then long term loans, therefore, these loans should be paid off as fast as possible to avoid additional and unnecessary costs. As a way to boost your loan repayment potential, you may consider increasing the frequency at which you repay your long term loans such as a mortgage. This can help reduce the interest you pay over the lifetime of your loan which may allow you to pay off your loan faster then expected.

Consider making Contributions

Making contributions to your super is a great way to boost your retirement savings and may help to reduce your taxable income. There are a multitude of contributions you can make to your superannuation that range from before tax contributions (Concessional) and after tax contributions (Non-Concessional). The effectiveness of these contributions may vary depending on your financial position and income so it is important to consult with your financial advisor before considering making a superannuation contribution.