Leave a Comment:
(0) comments
Add Your Reply
With the arrival of warmer weather, many people’s thoughts turn to spring cleaning. Why not apply the same energy to your finances? You might save yourself some money and have more time to enjoy the sun when summer comes. Here are some tips to help you thoroughly spring clean your finances.
Budget
The first step in dusting off your finances is to update your budget or create one if you don’t have one. Having a budget gives you some certainty and a plan to follow. If you’re not sure where to start, look online – AMP has a budget planner on its website, and you can buy budgeting software to help keep track of your money.
The importance of a budget shouldn’t be underestimated. It’s a way of taking stock – what assets you own, what debts you have and where you want to be in the future. It can also help you to clarify your goals.
Tax return
If you haven’t already submitted your tax return, you have until the end of October if you go the DIY route, or longer if you use a tax agent. You will need to gather all the receipts, group certificates and other documents you need, such as a statement from your private health fund.
While you’re at it, why not clear the clutter and set up a filing system for all your financial paperwork? It will make tax time next year much easier.
Banking
Inspect your savings accounts and see if you can make your money work harder. If you have several accounts, are you getting the best interest rate and competitive fees? It can be worth consolidating your savings to save on fees and make it easier to track your account activity.
If you want to save for a special purchase or event, an online savings account linked to your everyday account can help. You can transfer an agreed amount each month and often earn a higher rate of interest.
Credit cards and other debt
Credit cards are usually the most costly form of debt. It can be easy to accumulate credit cards over time, but how many do you really need? A good first step can be to purge your life of unnecessary cards, transferring the balances to the card offering the best rate. You should then pay off as much as you can each month, and you’ll be on your way to improving your finances.
See how shiny your financial reputation is by checking out your credit record. You can get a standard free report that will enable you to check the accuracy of your credit history. This could make life easier when you next apply for credit.
If it’s been a while, you should also consider reviewing your home loan and any personal loans and talk to your financial institution about the possibility of a better deal.
Retirement investments
Drag your super or retirement investments into the sunlight for review. If you have multiple funds you will be paying multiple fees and might want to consider consolidating your accounts. Also, check how your investments are performing and consider whether you need to change your investment option.
You can take a look at your own contributions, if you make them, and decide whether it would be a good idea to increase them.
You can also search for any “lost” super. Many people have a series of jobs when they are young, but they might not have kept track of any super payments made by employers. The Tax Office’s website has a search facility – go to www.superseeker.gov.au
Make sure your fund has your current address and contact details and that your information on beneficiaries is up to date. With that in mind, make a will or update your existing will. Wills can become outdated if you’ve had major changes in your life, such as a marriage, divorce or a major inheritance.
Insurance
Polish up your insurance cover by reviewing home and contents, health, car and life policies, and shop around to check that you are still getting the best premium and cover from each insurer. Life insurance policies need to be reviewed if your beneficiaries have changed due to a marriage or divorce. A change in circumstances, such as the birth of a child or a salary increase, might also mean you need to increase your cover.
House values can be affected by any major renovations, while new purchases can increase the value of your contents, so review both each year.
Finally, you might also give some thought to a safe storage place for important documents, such as birth certificates, wills and irreplaceable photos. Small home safes are inexpensive and some are fire-proof.
After scrubbing out any unnecessary debt, taking action to ensure your finances are working their hardest, and dusting the cobwebs off your retirement strategy, you’ll be returning the sparkle to your finances and you’ll be free to enjoy the sunshine.
By AMP financial planner Mohamed Said*
Mohamed Said is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult an accountant for tax-related advice and consider how appropriate the advice is to your objectives, financial situation and needs.
