Financial tasks to focus on each month
Rummaging through a box full of fading receipts and dusty documents at tax time is as close as some people get to a financial plan.
Tackling the task of creating a financial plan in one go can seem overwhelming to some people but if you break it down and concentrate on one task each month it can seem much more manageable.
Below are some examples of financial tasks to focus on each month. Aiming to complete your plan in stages can help you be clear about your goals and get yourself on firm financial footing for the year ahead.
Write down your financial goals. The New Year is a good time to think about new financial goals. To get started, you may want to decide on your financial priorities and set targets.
Create a budget. A budget will help you keep track of your income and spending. Remember to be realistic when setting up your budget and don't forget to examine your credit card payments.
Review your cash flow. Keep an eye on your money by creating an income statement and a balance sheet. Consider a cash management account to help you monitor your cash flow.
Reassess your savings goals and timelines. Consider your short, medium and long-term financial goals. Are you saving enough for your yearly holiday? Do you plan to buy a new car in a couple of years? Think about which savings vehicle (eg a term deposit) might help you reach those goals.
Examine your superannuation. Superannuation contributions can be divided into two types – concessional (before-tax) and non-concessional (after-tax). Each type of super contribution is subject to a cap. Now is a good time to review your contributions to ensure they have been optimised for the financial year and that the caps have not been exceeded.
Organise your documents for tax time. The end of the financial year is fast approaching, so don't leave your tax time preparation to the last minute. If you haven't started already, get your paperwork and receipts in order.
Review your investments. The start of the new financial year can be a good time to review your asset allocation and investment goals. Do you have exposure to a range of asset classes across your portfolio? Think about the risks and returns of your current portfolio, as your investment aims or circumstances may have changed since January.
The start of the new financial year can be a good time to review your financial goals.
Draft a will. If you don't have a will, should you pass away, everything you own will be shared in a standard way as defined by law. A will, or a full estate plan, can provide you and your family with peace of mind, and you should review it frequently to ensure it is in line with your wishes.
Review your insurance cover. Protecting you and your family in case of accident, illness or death is important. Check your personal insurance policies. Are your risks adequately covered?
Calculate the cost of education. If you have children, education is an important consideration and can be a big cost. How will you fund the school fees? Setting up a savings plan early is a good step.
Check your mortgage options. This can be a good time to review your mortgage costs and make sure you are getting the best deal available. By reviewing your refinancing options you could save money and pay off your mortgage sooner.
Evaluate the past year. The end of year can be a good time to reflect on the past 12 months and on the year ahead. It can also be a good time to examine your investment portfolio.