Sim­ple changes to im­me­di­ately move fi­nances in the right di­rec­tion

Hawke's Bay Today - - Business - Ge­off Wil­son A Canny View

There are a few ba­sic things that im­me­di­ately make me more pre­pared and hap­pier to face the day: drink a strong cup of cof­fee (or three!), have a tidy desk, and cre­ate a “to do” list.

It’s nice to know that I can es­tab­lish a good start to the day with such sim­ple tasks.

It got me think­ing that peo­ple rarely take this ap­proach with their fi­nances. Of­ten, fi­nan­cial mat­ters are treated like an over­stuffed, messy closet that needs to be dealt with but re­mains closed and put off for an­other time.

I can pro­cras­ti­nate along with the best of them yet putting things off just makes it more dif­fi­cult to en­joy “down time” be­cause there is this nag­ging sense that some­thing im­por­tant needs to be ad­dressed.

The good news is that a few sim­ple changes can im­me­di­ately get your fi­nances mov­ing in the right di­rec­tion. I have in­ten­tion­ally picked three things that you can and should do right away. Tackle those three, and you might just be­come mo­ti­vated to do more.

The key part is to set your­self a dead­line be­cause there is no bet­ter mo­ti­va­tor than a sense of ur­gency.

With less than two months left in the year, our thoughts are be­gin­ning to turn to­wards re­lax­ation — Christ­mas, New Year, sum­mer hol­i­days — but this is also a great time to start mak­ing solid res­o­lu­tions that can help get you closer to your fi­nan­cial goals, whether it’s in­creas­ing your re­tire­ment sav­ings or set­ting enough money aside for a down pay­ment on a house.

■ Con­sider your re­tire­ment goals

It can be hard think­ing about re­tire­ment, es­pe­cially when it is a way off, but set­ting and work­ing to­wards a goal for your re­tire­ment to­day will help im­prove your life­style choices later.

Yet, as the adage goes, if you don’t know where you are go­ing, how will you know when you get there?

Re­tire­ment is no longer the tra­di­tional ceas­ing of work aged 65 and lead­ing a life of leisure.

The new def­i­ni­tion of re­tire­ment is be­ing able to do what you want, when you want, and how you want. This can of­ten com­prise a ful­fill­ing com­bi­na­tion of qual­ity leisure, sat­is­fy­ing work and self­im­prove­ment.

Take time to con­tem­plate what gives you mean­ing and pur­pose, what makes you happy, and the legacy that you wish to leave be­hind. Con­sider where health, work, fam­ily, leisure and your home fit into this equa­tion.

Once you have de­vel­oped your sense of di­rec­tion, then con­sider how your fi­nances can help sup­port you in achiev­ing your goals.

■ Re­view your Ki­wiSaver

For most of us, Ki­wiSaver is the main ve­hi­cle that will help us reach our re­tire­ment goals. And, as with Ge­off Wil­son is a Reg­is­tered Fi­nan­cial Ad­viser and Ki­wiSaver ad­viser at Stew­art Group — a Hawke’s Bay-based in­de­pen­dent fi­nan­cial ad­vi­sory firm based in Hast­ings. Stew­art Group works with in­di­vid­u­als, fam­i­lies, and busi­nesses in New Zea­land who are com­mit­ted to pur­su­ing fi­nan­cial plan­ning and well­be­ing. Our clients un­der­stand the value of in­de­pen­dent, goal ori­ented and ob­jec­tive fi­nan­cial ad­vice that is free of con­flicts. If that sounds like you, we would love to hear from you. our cars, it’s im­por­tant to en­sure that our Ki­wiSaver meets our re­quire­ments and runs prop­erly and ef­fi­ciently.

It’s a good idea to spend some time re­view­ing your in­vest­ments and mak­ing sure you’re max­imis­ing your re­turns.

Check whether the fund you’re in­vested in is ap­pro­pri­ate for your needs and tol­er­ance to risk. En­sure you are con­tribut­ing enough to take ad­van­tage of the free gov­ern­ment con­tri­bu­tions (up to $521.43).

If you are cur­rently con­tribut­ing the 3 per cent min­i­mum em­ployee con­tri­bu­tion from your salary, de­ter­mine the im­pact of in­creas­ing your con­tri­bu­tion rate to 4 per cent or 8 per cent. In­creas­ing your em­ployee con­tri­bu­tions is one of the most ef­fec­tive ways to en­hance your fu­ture sav­ings.

Pay­ing too much tax won’t help you to reach your re­tire­ment sav­ings goal, so it’s im­por­tant to check your Pre­scribed In­vestor Rate (PIR) is cor­rect.

This de­fines the amount of tax you’ll pay on your Ki­wiSaver in­vest­ment in­come — if it’s too high, you’ll be pay­ing tax you won’t be able to claim back; if it’s too low, you’ll need to file a tax re­turn and pay the out­stand­ing amount.

■ Re­view all your in­sur­ance cov­ers

Fi­nally, take a good look at your in­sur­ance cov­ers for per­sonal, home, auto, li­a­bil­ity, etc, to be sure that you have ap­pro­pri­ate cover — and that you’re not over­pay­ing.

Es­tab­lish whether you could in­crease some ex­cesses to save on pre­mi­ums or check if you have some un­nec­es­sary “ex­tra” fea­tures in your pol­icy that are an ad­di­tional ex­pense.

It also pays to com­pare in­sur­ance cov­ers pe­ri­od­i­cally — es­pe­cially where you have a good claims record — as com­pa­nies ad­just pric­ing fre­quently to ac­quire new cus­tomers.

If in doubt, seek­ing im­par­tial ad­vice from an in­sur­ance ad­viser should help pro­vide value for money cover, and peace of mind.

Strength­en­ing your fi­nances shouldn’t re­quire a com­plete over­haul your life; a few easy tasks can set you on the right path, and, more im­por­tantly, help ease that nag­ging feel­ing that you are ne­glect­ing some­thing im­por­tant.

■ The in­for­ma­tion pro­vided, or any opin­ions ex­pressed in this ar­ti­cle, are of a gen­eral na­ture only and should not be con­strued or re­lied on as a rec­om­men­da­tion to in­vest in a fi­nan­cial prod­uct or class of fi­nan­cial prod­ucts. You should seek fi­nan­cial ad­vice spe­cific to your cir­cum­stances from an Au­tho­rised Fi­nan­cial Ad­viser be­fore mak­ing any fi­nan­cial de­ci­sions. A dis­clo­sure state­ment can be ob­tained free of charge by call­ing 0800 878 961.

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