Earning money is often at the forefront of someone’s mind when it comes to their finances, but being on top of your savings and investments and ensuring you are doing as well as you can is equally as important. Join us this week as we dive into money maintenance and some tips you can use:
Annual Reviews
Different assets require attention more frequently than others. Firstly, insurance policies are one of the things you should probably review every 12 months or so. Host Andrew Baxter points out that life insurance policies are one of the key ones to be on top of as it does not kick off until after you have died and thus others around you are left to deal with it. With circumstances constantly changing in life, it is important to make sure the life insurance policy you have in place is appropriate and achieves what is needed for your family should the worst happen. Refinancing on loans such as mortgages may also be a consideration on an annual basis. As of late, interest rates have moved around quite a bit and the circumstances of a loan have a very different complexion. This may lead many to seek refinancing on their loans in search of a more favourable interest rate. If you have not already, this is definitely something to consider reviewing annually. Another thing you could look at annually is a tax depreciation report. These are particularly important if you’re an owner of an investment property as there is a wide array of things that can save you on your tax due to depreciation. A recent legislation change in Australia means now that rents can only be increased once a year so this is certainly something to review when it comes to any investment properties to make sure you are receiving an appropriate amount of rent on your property.
Quarterly Reviews
Those who are self-employed will know that quarterly reviews are arguably the most important checks to be making. Host Andrew Baxter explains that BAS statements and tax need to be done on a quarterly basis for someone who is self-employed. Missing these reviews can be costly so being on top of them is key to making the most of things while you are self-employed. Keeping these documents organised is another major consideration as losing track of your tax and BAS can have a major effect. Super can also be important for those that are self-employed. As you are not paid super by an employer, the onus is on you to ensure you are making contributions to your super. The performance of certain investments can often be reviewed every quarter despite fund managers and other advisors potentially telling you that a strategy is designed for the long-term and not to judge the strategy or performance off the back of just one quarter. Even if this is true, it is in your best interests to keep an eye on your investments to prevent any major calamities should they be faltering after just a few months. Financial planners should also be providing their clients with a statement of advice every 12 months but in reality you would be better served checking in much more regularly than that. Another quarterly review is of course the landlord inspection – again for the investment property owners among you.
Monthly Reviews
Each month is a great time to check on your own progress as you head towards your goals. Host Andrew Baxter notes that each month you haven’t gotten closer to your goals, you’ve actually gotten further away. Another important part of that process is making sure you reward yourself for those things that you have achieved. Holding yourself accountable for the action steps that need to be taken are vital because nobody else is going to make sure you are doing what needs to be done. Simply hoping things work out or happen for you is not going to work because hope is not a strategy so it is crucial to review the work you have done to achieve your goals and even the goals themselves to make sure they are suitable at the time.
