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Find out easy inside tips and advice from our expertise and experience to help you get ahead

No matter how tough the past year was, a new year is an opportunity to reassess your financial goals from wherever you may be starting from. Here are 6 things you can do right now to improve your bottom line this year.

1. Understand what your end goal looks like

Begin with the end in mind. How much do you need to retire on? Where might you want to live? Compare that to where you are today to see what is required to get you there?

Now brainstorm ideas and write a list of everything you can do to move you in the direction of your end goal. You may not do everything on the list, but it will open your mind to all possibilities and re-sources potentially available to you. Is it to work on increasing your income? Or reducing your expenses? Or building that investment portfolio to create future cashflow?

2. Review your expenses and create a personal budget

The nitty gritty of achieving a financial goal usually involves increasing your income, or reducing your expenses, or investing the difference into investments. Ideally, it is a combination of all three!

NZ households’ largest expenses are housing, transport, and food and utilities. If you can tackle these major items, it will mean more money to pay off your home or build that investment portfolio. Can you spend less on depreciable assets such as a car? Can you reduce your grocery bill by buy-ing less packaged processed foods? You could become healthier at the same time as saving mon-ey. Can you review your utilities and insurance providers?

A review of these major household expenses and sticking to a budget can potentially save you thousands of dollars a year. Spending less on depreciable items will mean more money to pay off your home or for investments, and ultimately, financial independence.

3. Review your loans and banking facilities

Your current loans and debts may have served you well up to now. It is beneficial however, to do a yearly review with your mortgage broker to see whether you can optimise your finances further.

Your mortgage broker will be able to:
– help you find the best deal and lowest interest rates suitable for your needs from all of NZ’s banks, saving you time and energy;
– help you consolidate your personal loans to pay them off sooner, and at lower cost;
– advise the latest requirements from NZ’s banks and financial regulators and how you meet these before your next purchase;
– help you restructure and simplify your portfolio. Do you have cross collateralised loans which can now be un-collateralised, simplifying your structure for future sale perhaps? Is there available equity to access in your existing property to go towards your next purchase?

Your mortgage broker will be happy to answer these and many more of your questions.

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4. Have a strategy for tackling debt

Do you know the interest rates you are paying on all your debts? It is a good strategy to pay off loans at the highest interest rate first, as this will save you thousands of dollars in the long run.

If you are paying off credit card debt or personal loans every month, consider consolidating these into your mortgage with a lower interest rate so you can save money. Your mortgage broker can help you work out what debts to pay off first, or how to reschedule your debts into your mortgage.

5. Meet with your financial adviser twice a year

Using a financial adviser is not only limited to the wealthy. Anybody who is interested in improving their finances can benefit from a professional’s point of view. In our busy lives, we may not think about our money and where it goes everyday. However, your financial adviser lives and breathes this day-in, day-out, and will have likely encountered and helped many clients in situations similar to yours.

A financial planning session can help clarify your financial goals, and set out a plan to achieve them. Your big dreams could become more achievable once you have a clear plan with actionable steps to take. A follow up session every 6-12 months can help keep you on track and make adjustments according to changes in your life circumstances.

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6. Increase your financial knowledge

Whilst seeking professional help is highly advisable for everyone interested in improving their finances, the cherry on top is gaining knowledge for yourself. Dedicate a couple of hours a week to reading about investing and money management. Listen to podcasts during your commute or whilst doing household chores. To start off, it may even be as simple as taking a look at your bank ac-count regularly to see where you spend your money every week. Doing something consistently will help maintain your progress and commitment to achieving your goals.

Start the new year afresh and contact us at Luminate to discuss how we can help you achieve your financial goals!