New year, new financial you

THE start of a new financial year is the ideal time for you to sit down and review your financial situation.

Regardless of whether you had a great year or you feel you could’ve done a little more to achieve your financial goals, now is the time to take stock and make the changes needed to ensure FY 2018 is the best yet, says Mortgage Choice.

Take this time to review your bank accounts, whether it’s your everyday transaction account, your high interest savings account, or the offset account attached to your home loan.

Assess your debts: your home loans, any personal loans you may have or credit card debts and make sure you have a payment plan in place for each of them. Ask yourself a few simple questions like:

Have your financial needs changed in the last twelve months?

Were you lucky enough to receive a pay rise or a promotion?

Did you have to take extended leave as a result of illness or injury? Did you take on any new debt? Did you meet the goals you set for yourself in the last financial year? If not, why was that?

How you answer the above questions will dictate whether or not your financial situation has changed and/or needs to change this financial year.

If you would like to adjust your current financial situation and get your money to work harder for your needs, then listen up.

There are three easy steps you can follow to improve your financial situation.

Step 1: Do your research

One of the best ways to improve your financial situation is by looking online and seeing if there are other products that are better suited to your needs.

You may find there are lenders offering significantly lower mortgage rates, which could help you to reduce your monthly repayments and ultimately save you thousands of dollars.

The internet is a great source of knowledge on all financial matters.

You’ll find a variety of tips, products and services.

Do make sure however that you approach any material with a level of skepticism and accept that most of the advice you read online will be general and therefore not tailored to your unique financial situation.

Step 2: Speak to a professional

A qualified financial professional will be able to offer expert advice tailored to your specific situation.

When dealing with your home loan, it is essential that you speak to a professional who is qualified to make recommendations with your situation in mind.

For example, there has been a lot of noise in the media around investment loans.

Australia’s prudential regulator has made a number of recommendations and changes that have resulted in a complex lending environment.

Speaking to a broker will help you achieve clarity, and if you need to refinance your current loan, they will be able to give you options tailored to your short and long term needs.

Step 3: Do a home loan health check

Ideally, you should be checking the health of your home loan once a year.

Ensure you’re in the right product for your current financial situation and take advantage of the historically low interest rates. Consider that a reduction of just 0.5% could save you hundreds of dollars per annum.

There are a number of ways you could be investing those savings and potentially paying your home loan off faster than you’d planned.