Stay on track with our 5-step New Year financial checklist

First published 06 January 2021, 12:00 PM

New Year, new you, new resolutions - it’s that time of year when we get to hit the reset button and start afresh. When it comes to our finances, a flip of the calendar is the perfect time to think about the coming year - where we want to be, and what we need to do in order to get there.

Not sure where to begin? Our financial checklist for the New Year could be your starting point to get your financial priorities back on track in 2021.

1. Review your home loan

Your home loan is likely to be your most significant financial commitment. So, it’s extremely important that you’re not paying more than you have to.

Right now, we are seeing record low interest rates - in some cases 2% or less, across both variable and fixed rate home loan products. That means now is the ideal me to check in with your Mortgage Choice broker to see if you’re getting a competitive deal.

If you’ve been with the same loan for 2 years or more, chances are you could get a better rate with a different lender.

And, if 2021 is the year you’re looking to get started as a first home buyer, now is the time to get expert advice and take the first steps toward turning your dream into a reality. Spend 5 minutes answering a few questions and we'll give you a breakdown of how much you could borrow.

2. Revisit your budget

Find your fiscal focus in 2021 by taking stock of your finances. A few minutes spent reviewing your expenses can ensure that you are only spending on essentials. A quick look back through your transaction and credit card account will reveal opportunities where you may be able to cut back spending.

3. Resist the urge to splurge

Between the Boxing Day sales and summer stock clearances - your email inbox and social media is likely to be bombarded with ads for bargain buys. If you’re trying to stick to a budget, it’s time to hit unsubscribe!

4. Take steps to build an emergency fund

You never know when those out-of-the-blue expenses are going to hit. But when they do, they can hit hard.

Having funds set aside can be a vital resource to manage unplanned costs. If you don’t have an emergency savings account in place, 3 easy steps can help you get started.

Assess Your Budget - If you’ve never created a budget, it’s definitely a step worth taking. A budget gives you an overall view of your finances and helps give you regain control. Your budget should include how much you have coming in, and how much is going out over a set period of time. That way you can see where you can reduce spending and plan for other expenses.
Pick one thing, cut it and save the costs! - Is 2021 the time to ditch the daily take away or unused gym membership? Pick one regular cost, think about how you can reduce it, calculate how much you’re saving each month from this simple change, and capture that amount by putting the cash towards your emergency fund.
Prioritise saving habits - Don’t stop just because you’ve hit your initial savings target! Steadily increase your savings goals until you have a significant buffer against unexpected emergencies. It’s a great way to breathe easy, free from financial stress.

5. Review your insurances

Life cover can be bewildering, and the question of how much insurance we should have is something few people can answer with confidence. The level of life cover that’s right for your needs depends on a variety of factors including your age, family situation and how much debt you have.

What matters is that you have sufficient life cover in place to let you and/or your family live comfortably if the unthinkable happened with a sustainable solution in place that allows you to satisfy all the other priorities you have in life. These priorities could include growing your retirement nest egg and all the other demands on your cash flow such as your children's education, home renovations, family holidays... the list goes on.

Expert advice has never been more important

In our busy lives, your New Year resolutions can easily fall by the wayside not long after you set them! The key is to have a plan of action in place.

The good news is, there’s no need to go at it alone.

In fact, when it comes to your finances getting expert advice has never been more important. Not only does it give you peace of mind, it can provide you with the confidence you need to make better choices when it comes to your financial wellbeing.

Contact us today to see how we could help you get your financial wellbeing off to a good start for 2021!