Financial Planning For A Great Year

Financial Planning For A Great Year

With the current high inflation, high interest rate environment, it has never been more important to take a serious look at your financial position. The idea of reviewing your financial planning for a whole year can be daunting, but as with any task, if you break it down into more manageable chunks, you are more likely to stick to your plans and achieve your goals.

Here are some tips to ensure you are on track with financial planning for a great year.

Your Year In Review

Before you get started on planning for the coming year, it’s worthwhile having a look at how you went over last year. Did you achieve your financial goals, no matter how vague they might have been? If not, what got in your way? Recognising where you went astray will help you avoid the same problems this year, or at least to plan for those that can’t be avoided

January-March

This is the time for turning vague notions and wishes into defined, achievable goals via a budget. Whether you are saving for a house, preparing for retirement, or working towards being debt-free, putting your goals on paper, with dollar values and timing attached, will help you monitor your progress until you ultimately achieve your goals.

Don’t forget to build in some short-term goals. Financial planning and saving can be a bit like dieting. If you deny yourself those little treats completely, it’s much harder to stay the course for a prolonged period. So make allowance in your budget for the occasional treat.

Look at your anticipated expenditure on a monthly basis. Are there any pinch points in your cashflow, like car insurance and registration due in the same month all your family birthdays occur? Or house insurance due in December? Think about how these expenses can be smoothed over. For instance, consider paying insurance monthly, or paying car registration for six months as a one-off, in order to change renewal dates.

Put together a monthly budget for the year, then spend this first three months tracking your expenditure so you can identify any areas of ‘leakage’ and make adjustments where necessary.

April-June

Assuming you are tracking well with your budget, or have adjusted accordingly, the second quarter of the year is all about preparing your finances to optimise your tax position.

If you want to make some additional payments into your superannuation, now is the time to do so within the relevant limits available to you.

Think about tax deductible expenses. If you know there are things you may need in the coming months, like a new laptop or desk chair, or repairs on an investment property, it’s a good idea to purchase them before the end of the financial year in order to claim the expense as soon as possible.

If your budget allows, you might also take advantage of the End of Financial Year sales. Because who doesn’t love a bargain?

July-September

First and foremost, get that tax return in. Particularly if you are expecting a refund. The sooner it’s in your pocket, the sooner you can take advantage of that windfall, whether you use it to pay bills, or treat yourself to something fun. Whatever you decide to do with it, just make sure it’s all part of The Plan.

This quarter is also a good time to do a bit of financial spring cleaning. Look at things like:

• Interest rates – are you getting the best deal on your mortgage, savings, credit cards or any other loans? If not, don’t be afraid to ask. And if you’re still not happy, vote with your feet. Searching out the best rates can make a huge difference to your bottom line come the end of the year.
• Consolidation – while looking at interest rates, think about whether your debts are effectively structured. Can you consolidate and save money?
• Utilities – are you getting the best deal on electricity, gas, phone, internet, car insurance, house insurance, health insurance, and any other regular bills.
• Wills & Power of Attorney – are these documents all accurate and up to date?

October-December

You’re on the home stretch now. How is it looking, are you on track to achieve The Plan? If not, where did things go off the rails, was your original plan unrealistic? It’s never too late to make adjustments to your plan and it’s certainly never too late to learn from your miscalculations.

Sometime between the Christmas pudding and the New Year’s Eve fireworks, put aside a little time to look at what you’ve achieved. Regardless of whether you achieved the entirety of your financial plan for a great year, by doing the planning you will undoubtedly have achieved more than if you had done nothing.

Now take a deep breath, update your goals, and get started on a new plan for the coming year.

 Who Can Help?

Financial planning for a great year doesn’t have to be a chore. Nor do you have to go it alone. A good financial adviser can help you define realistic goals, develop budgets and make any changes you need in your financial arrangements.

If you would like help planning for a great year, Manly Financial Planning have the experience and expertise you need. Call us for a chat on (02) 9976 3388, or contact us via the below link, if you’d like to know more.

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