Many people use the Christmas/New Year period to reflect on the year that has just passed, often in a blur, and begin thinking about the future and how to achieve their hopes and dreams. It is a good opportunity to reconsider financial strategies and goals.
Below is a simple guide to tidy up your finances for the year ahead.
1. Have your key financial goals changed?
Our lives are not constant and our goals change slightly (or greatly) from year to year. Also, major life events such as serious illness, the birth of a child, inheritance, marriage or the death of a parent or spouse can all result in significant changes to our wealth management goals.
2. Prioritise your goals.
Not all goals are equal and to ensure you aren’t overwhelmed with the task it’s important to rank and prioritise goals and decide in what timeframe you want to reach them. Being realistic about your timeframe is essential to ensuring that your goals will be achieved.
3. Short, medium or long term?
Most industry experts agree that a short-term goal is one that can be achieved within a year or so. Medium-term goals typically require two to five years, and long-term goals usually take longer than five years.
For example, reducing credit card debt is likely to be a short-term goal, whereas saving for a home deposit would often be a medium-term goal. Depending on your age, providing for retirement is a long-term goal.
4. Be investment savvy.
Make sure that your investments support your level of risk and your goals. A tailored analysis will address your individual risk preferences and goals. Regular portfolio reviews are essential to determine any sell-downs or top-ups that would benefit you. Your adviser should work closely with your accountant to ensure any changes are implemented in a tax-effective manner.
5. If your financial goals have changed, how will this affect your financial strategy?
Licensed advisers have the tools and knowledge to create projections that take into account changes to your goals, and changes to your timeframes for achieving them. These projections will help you to see where your plans for savings, assets or investment contributions may need updating.
Reflecting and thinking about your financial position and setting a clear path is critical to making sure you reach your goals. Talk to our licensed financial planner about making sure you are on track.
Call 02 4926 2300 or email success@leenanetempleton.com.au
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