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[26-Jun-08]
Have you thought about your New (financial) Year resolutions?
Dalby-based senior financial planner Shane Lee of BMO Financial Services, says the end-of-financial-year is a great opportunity to get all your financial affairs in order and get you on track for a prosperous new year.
Here’s Mr Lee’s tips for kicking off the new financial year the right way:
Get your tax refund sooner rather than later
If you’re pretty sure you’ll be receiving a tax refund, get your 2007-2008 figures together as soon as you can. Mr Lee recommends using a qualified accountant to complete your tax return rather than the Do-It-Yourself method.
“It might cost you a little bit more, but you’ll usually find yourself in a better position if you get professional advice. And besides, accounting fees are tax deductible.
“If you receive a refund you can use it to pay off credit card or personal debt or kick start an investment program. The sooner you’re making that refund work for you, the better.”
Review your spending
Do a review of all of your income and spending for the year (as best you can). Where are you overspending? Where can you cut back? Some people find that small changes – like limiting take-away to one night per week, can have a big impact across the year. For example, deleting one family take-away meal per week can add up to something like $1500 over the year!
Discuss your goals
Sit down with the family and talk about your short term plans for the 2008-2009 year. Do you want to save for a particular item – a new TV, a holiday, or the children’s education fund? Then discuss your long term goals: What are your dreams for retirement? Do you have a picture of where you want to be? How much money will you need to be comfortable?
Prepare a budget
According to Mr Lee, the dreaded “B” word doesn’t have to be scary if you are realistic about it.
“Don’t pretend that you’re not going to buy a few frivolous things – but instead look at your spending patterns for last year and make allowances. If the budget is real then you have a better chance of sticking to it.”
Most financial planners will have a program or template that can help you create an effective budget that’s tailored to you.
Are you protected?
Have a look at your current insurances. If your family stopped receiving your income because of injury, illness or death, would they still be able to make your mortgage payments, pay the electricity and phone, what about groceries or school fees?
“The last thing you want to do is lose the home you’ve worked hard for because you didn’t have the right insurances in place. Most people discover they don’t have nearly enough insurance protection,” said Mr Lee.
Get professional help!
“Many people don’t realise the importance of using the services of a financial planner to get started on an investment program designed to grow wealth over time,” Mr Lee said.
“A good financial planner can help determine your financial goals and needs - taking into account your personal goals and dreams, create a tailored financial plan for you, and recommend investment and financial products.”
And he stressed that financial planning is not just for the wealthy.
“You don’t have to be in big business earning millions. Everyday wage earners can get excellent value from financial planners. Especially if you have started dabbling in investing or savings plans but aren’t sure if you’re on track. You might have a rental property or a few shares, maybe a mortgage – a financial planner can help you structure your financial affairs to give you the most benefit.
“Simple changes to the way you have your investments structured, or the way you are saving for the future can make a big difference to the kind of retirement you’re going to have.”
Information provided in this article is general in nature. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend obtaining financial advice specific to their situation before making any financial decisions or investments.
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