5 simple financial New Year’s resolutions

The new year is here and after an indulgent holiday break most of us are happily fixated on health goals. Kale sales will no doubt sky rocket in the next couple of weeks, along with gym memberships, as we all vow to lose five kilos. But what about ‘financial health’ resolutions for 2017?

With a little focus and thought (while jogging at the gym in the first couple of weeks of January?) we can also get our finances in great shape.

Here’s 5 simple ways that each take 15 mins or less.

 

  1. Calculate your net worth

The new year is a good time to get a clear picture of where you are at financially. Calculating your net worth is the financial equivalent of putting yourself on the scales. Add up your assets and liabilities and get yourself to a net worth figure as the starting point for your financial resolutions for 2017. And by assets I mean your house, investments, shares, superannuation (we are not talking assets of the genetic variety unless you happen to be a Victoria Secret model). Debts are thing such as credit card debt, personal loans, mortgages and investment loans.

Time = 10 minutes

 

  1. Work out what it’s all for

Many Australians put financial goals in the too hard, or ‘I’ll get around to that’ basket. If you don’t have clear financial goals, sit yourself down for 15 minutes, alone, or with a partner or your family and work out what it is that you want. Do you want to own your home by 50? Head to Europe for 6 weeks next year? Build a new house by 2020? Take a year off work? Write down your short and long term goals. If you do have financial goals already set, the new year is a great time to review these and see if they still apply and how you tracked against them in 2016.

Time = 15 minutes

 

  1. Get the credit card under control

How are the credit cards looking? Were they hit hard pre Christmas, or the boxing day sales?! We all know credit card debt has significantly higher interest than residential mortgages and repayment minimums are set low. It is easier than ever to rack up credit card debt.

If you have $4,400 of credit card debt and only make the minimum repayments, it will take you 31 years to pay it off and cost you around $14,900 in interest.*

Set yourself a goal to get any credit card debt paid off as soon as possible. If it is all looking a bit difficult, you can look at consolidating debt to make it one payment at a lower interest rate. If you need any advice or assistance with debt consolidation please get in touch.

Time = 10 minutes

 

  1. Pay extra off your mortgage

In the classic ‘pay yourself first’ way of saving, can you make additional payments on your mortgage in 2017? For example, a couple with a $400,000 mortgage could save around $50,000 and pay off their debt almost four years earlier by contributing $200 extra monthly,’ If you decide you want to make extra repayments, consider automating your payment, that way you’ll be saving without much thought, and have no excuse for not making payments.

Time = 10 mins to set up automatic payment

 

  1. Start planting some ‘investment’ trees

In the words of billionaire investor Warren Buffet “Someone’s sitting in the shade today because someone planted a tree a long time ago.” If you don’t currently have investments, you could start thinking about or researching investing. While there is no guarantee on any investment asset type, whether that’s property investment, shares, having either equity (cash) or debt (loan) funded investments can be a significant way to build wealth over time. If you already have investments, take the time to stop and review your current investment strategy – are you happy with your current leverage? (debt to equity ratio), investment mix and amount of investments? And don’t forget, your Mortgage Broker can also assist with investment loans for property or shares.

Time = 15 minutes

 

So skip the Netflix binge for a night and set yourself up for a financially healthy 2017! A small investment of your time can pay big dividends.

 

Douglas Piening is a Mortgage and Finance Broker with Choice Home Loans and is passionate about providing advice you can trust. Whether it’s buying a home, refinancing a loan, investing, building or renovating, Doug brings a wealth of knowledge and expertise to assist with your lending needs. 

You can contact Doug at (e) douglas.piening@choicehomeloans.com.au or (m)  0408 671 524.

Want to hear what clients have said about working with Doug? Take a look at these reviews from LinkedIn and Facebook.

This information is of a general nature only and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.

*Source: ASCI Moneysmart https://www.moneysmart.gov.au/borrowing-and-credit/credit-cards/credit-card-debt-clock