Get financially sorted in 2024 with these steps.
Heading into 2024, it’s time to revisit your finances and curate some achievable financial goals – that you can actually stick to! Here are 4 financial resolutions that will have a lasting effect on your financial wellbeing.
Whilst finances (for some) may not seem as exciting as making other new year resolutions, such as, eating healthier or working out more – we think that taking control and understanding your finances with a well-drawn up plan can often help with your physical and mental health.
1. Create or Review your Estate plans
The New Year is really good time to reflect on any changes to your family’s dynamic.
Has there been any major events since you last update your estate plan? For example, marriage, divorce, purchase of property, or the birth of a child? If so, do you have Will, or does the Will still set forth your wishes? Do you have a Power of Attorney, and is that person still able and willing? Have you though about Guardianship orders to ensure your child will be cared for?
Consider completing your estate plan a priority matter for this coming year. An estate plan ensures that your assets are distributed according to your wishes.
2. Revisit your Asset Allocation
Calendar years are an easy way to ensure you remember to reflect on your asset allocation.
Plan to revisit your asset allocation within your portfolio sometime in the early new year. Are your assets appropriately set amongst growth (e.g. shares) and defensive assets (e.g. cash)? Asset allocation weightings should ideally reflect the time horizon of your saving goals and your life stage.
Ensuring your asset allocation is still correct for your time horizon can assist with your exposure to market volatility and ensuring your maintain liquidity.
3. Check your Household Budget and Emergency Fund
With the Consumer Price Index recording a 5.4% annual change in the September quarter, it’s a good time of year to set-up or revisit your Households budget and to ensure that your rainy day account has enough funds to cover your family.
Assess your fixed and variable costs, check your ongoing subscriptions that you’ve signed up to over the last 12-months and consider ways to cut-back on these expenses. Are your expenses able to be met by your income?
Now that you’ve checked over your budget, it is a good idea to make sure your Emergency Fund has adequate funds to support you and your family in the case of a rainy day. This Moneysmart article suggests that an emergency fund to cover three months of expenses is a good target.
4. Assess your Personal Insurances
Setting time aside to check your personal insurances such as, Life, Total and Permanent Disability (“TPD”), Income Protection or Trauma, can ensure that you are adequately covered according to your needs.
We recommend once you’ve reflected on your family dynamics (1), personal assets and portfolio (2) and your income and expenses (3), it is a good time to understand what you need cover for. For example, has your levels of debt increased or decreased? Have you had a pay rise at work? Have you had a role change at work?
It is an opportune time to ensure that your levels of cover are appropriate for your needs.
If you want professional guidance and mentoring for your financial resolutions, make a time for a free – no obligation meeting with us today.
