There’s never a bad time to look at your financial health, but the start of a new year helps to focus minds and give the process a kickstart.
Financial planning needs to feel clear, achievable and never overwhelming. If there’s room for improvement, the best advice is to get started straight away and avoid putting off a long, hard look at your finances.
Read on for all the financial health strategies you need for making short and long-term financial objectives by identifying your key priorities.
A Personalised & Comprehensive Financial Plan
There are no one-size-fits-all financial health strategies that will suit everyone. Our circumstances vary due to an almost infinite list of dependencies. What matters is that you have a plan tailored specifically to you at any given moment in your life.
Here are a few essential questions to ask yourself and to set the ball rolling:
- Do you have an emergency fund for unexpected events?
- What is your true financial worth?
- Where would you like to be financially in five years?
- If you have debt, how much of it is at a higher interest rate?
- Do you have a retirement plan, and is it protected with life insurance?
- Are you in control of your finances?
A Brisbane financial planner like PAC Financial can guide you through some of the answers to these questions. They’re available to help you come up with a personalised plan that’s right for you.
Investment Strategies for 2024
There’s an expectation that interest rates will eventually fall in 2024. That’s good news for borrowers and those applying for mortgages. Inflation may well fall too.
If you have investments, now is a good time to revisit your asset allocation and consider how it gets split between equities, fixed income and cash. Ideally, your portfolio’s asset allocation should match your differing life stages and the saving goals connected to them.
For instance, as you head towards retirement, you may want to consider moving components of your portfolio into a more conservative asset allocation, like fixed income. Or, if any recent downturns in the financial markets have prevented your portfolio investments from meeting the targets you’ve set yourself, it may be time for a rethink.
It’s wise to bear in mind that as you approach retirement age, you’ll be less able to absorb volatility from the stock market. An experienced financial adviser at PAC Financial can help you understand the risks involved so you can make intelligent informed choices.
Budgeting and Cashflow Management
You may think you have your finances under control because it was only relatively recently that you checked them. The fact is that spending habits can drift over time, inflation can put a hole in your food budget, and interest rates on debt can suddenly increase.
The bottom line is that your financial health may need consistent tweaking over short periods of time. Think of careful financial planning as being a bit like washing up as you go along. Rather than letting the dirty dishes mount up so that, in the end, you have no more clean plates to use, you’ll always feel more in control.
Take a snapshot of what came in and what went out of your bank account over a given month. Here are some useful tips and questions to ask yourself:
- Are there any services like TV subscriptions that you don’t use and could cancel?
- Shop around for car or household insurance a month or so before they’re due.
- Are you within your budget with spending on meals out and entertainment?
- Are you in a position to set aside more money to save, given high-interest rates?
- Are you using all available apps to track and manage your outgoings?
Once you’ve mastered your own financial planning budget, you should be able to take a quick look on your smartphone at the end of each day to double-check that everything is in order.
How to Manage Debt More Effectively
If you are in debt, the worst of all financial health strategies is to bury your head in the sand. If you do that, the likelihood is that the debt will simply get worse and worse. Regardless of the size of your debt, you should have a plan to pay it off and keep it under control.
Debt consolidation may be an option. Rather than having multiple debts on different credit cards, for example, you could pay everything off and consolidate your debt into a single entity at a lower rate of interest. This makes it far simpler to stay on top of your finances and gives back a sense of greater personal control.
If you anticipate getting a salary increase or a year-end bonus, you should think about using the extra income to pay off any outstanding balances. You should discuss the different options available for tackling debt with a financial planner, like PAC Financial, to ensure you maintain a healthy debt-to-income ratio.
Building up and Safeguarding Your Savings
Adding to a fund ring-fenced for emergencies can give a real boost to your financial health. These savings should be available for unexpected emergencies like car repairs or losing your job.
The ideal amount would be to have three to six months’ worth of living expenses in your emergency fund. Although you should be able to have instant access to this fund, you should still be able to make it grow and work for you. Your Brisbane financial planner will help you make this one of your integral financial health strategies.
Talk to PAC Financial Today!
Your financial health is going to play an important part in your general sense of well-being. It will have an impact on all your future options, from the kinds of holidays you prefer to take to your retirement plan.
PAC Financial offers a full range of financial planning services. Let us work with you to create financial health strategies appropriate to your current circumstances. Get in touch with one of the team today for a free consultation.