In our last blog of the year, we wanted to drag you away from Christmas party planning and present shopping just for a minute and cast your minds forward to 2020.
We know it’s a crazy time of year and it’s around this time that we can feel a bit like we’re constantly chasing your tail. But we challenge you to take a minute and have a read of our 5-step financial to-do list for next year.
You might even like to include some of these in your New Year’s Resolutions to help you get 2020 off to the right start.
1. Review your KiwiSaver
If you’re not on KiwiSaver you’re missing a seriously good retirement savings opportunity and signing up should be your priority, no matter how far away from retirement you are.
But, if like most Kiwis, you’re already part of KiwiSaver, use this time of year to review your position.
Firstly, we recommend looking at the different providers out there and comparing the different returns, fees and taxes that you can expect from each.
Next, review what type of fund you’re in. You might have originally signed up for a growth or aggressive fund but if retirement is approaching, now might be the time to look at a balanced or conservative fund.
Similarly, if you’re in a default conservative fund, look at how different your returns could be in a more aggressive fund.
As wise investors we should always be reviewing where we keep our money and KiwiSaver is no different.
2. Review your insurances
We know it might seem like we bang on about this quite a bit, but it really is so important and can make a big difference to your household finances.
If you’ve got us on board to manage your insurances, then you’re in good hands and we’ll work to keep you up to date on policy changes and opportunities.
Make sure you let us know if your circumstances change so that we can make sure your insurances are still right for you.
Moving to a new house, buying an investment property or having another child are all examples of major life changes that will affect your insurance portfolio.
With a broker on board, reviewing insurances is easy. Just fire us an email to get things underway.
3. Review your mortgages
Often, we get locked into fixed mortgage terms and think there’s no way out. But this isn’t necessarily the case.
Breaking a fixed mortgage usually means paying break fees but these can be cheaper than the interest you would have paid anyway on a higher rate.
It’s always worth doing the maths to see if break fees are still worthwhile to move to a lower rate.
Similarly, when was the last time you looked outside your usual bank? Other banks are often willing to offer better rates and cash bonuses in order to secure your business.
There’s no denying that changing banks can be a rigmarole especially when there are mortgages involved but a financial pay off can make it worth the effort.
We are currently in a situation where interest rates are dropping regularly and banks are fighting for business so a review is always worthwhile.
Don’t forget, we have in-house home loan experts who can help with this!
4. Review your household bills
Are you sensing a theme yet?
We pay a lot of bills each month and, as technology marches on, there are more and more expenses that are becoming a necessity in a modern world.
Chances are that each month you pay most, if not all of the following: Power, gas, internet, TV streaming, music subscription, health and wellbeing apps, gym membership, mobile provider and the list goes on.
That’s a lot of technology and a lot of bills to pay. In the new year, look at all your bills and investigate other providers who are either cheaper, or, provide more for the same amount.
There’s a good chance you could be paying less and getting more for your money.
5. Track your spending
When it comes to tracking spending, everyone is different. Some of us will create a budget and follow it religiously to make sure every loaf of bread, new t-shirt, and petrol station visit is planned and accounted for.
Others will take a more general approach to make sure they know what bills and the weekly shop are costing them. Many of us won’t track our spending at all.
Tracking isn’t about denying yourself or keeping things cheap if you don’t want it to be about that. Instead, look at tracking as an efficient way of making sure your money works for you. This process helps you understand how much money you’ve got coming in and where it’s going.
Tracking and then budgeting are also a great help if you’re saving for big ticket items like a new car, renovation or overseas holiday. Having a budget can help you make sure you’re saving what you need to reach your goal in time.
As our final step we challenge you to look at your expenses over the last few months and see where your money is being spent. You may find that your online banking also has tools to help with this.
Then, take what you’ve learned and use it as a tool to help you prioritise your spending for next year.
As this is our final blog for 2019, we’ll sign off by wishing you and your loved ones a fantastic Christmas and a very happy new year. We’ll be back in February with our next blog.