Why now is the time to set your financial goals for 2018

ASIC is encouraging Australians to start the New Year by setting financial goals.

Set your financial goals for 2018

The Australian Securities and Investments Commission (ASIC) is encouraging Australians to start the New Year by setting financial goals.

“Every January, one of the most popular New Year resolutions people make is to take control of their money,” said ASIC’s Laura Higgins.

“Yet according to research conducted for ASIC, about 44 per cent of Australians say they have a short term financial plan in place, while only 23 per cent say they have a long-term plan.

“Having a financial plan in place is key to getting on top of your finances,” Ms Higgins said.

“Start by identifying your financial goals and what you want to achieve. Next, you can consider the steps you'll need to follow to make them happen, including how long it will take.”

Here are ASIC’s MoneySmart New Year financial resolutions to make your money work for you in 2018.

1. Make a plan for your money
According to ASIC's research, nine out of 10 Australians are keeping track of their finances and eight in 10 had a budget. Having a plan in place to manage your money will help you track your spending and understand your money habits. A budget is the cornerstone of a financial plan. Use ASIC’s MoneySmart interactive budget planner to help you work out where your money is going and where you might be able to save. ASIC's MoneySmart TrackMySPEND app can help to manage your personal expenses on the go.

2. Take charge of your debt
Get your finances on track in 2018 by taking control of your debts, including any credit cards that may work harder during the festive season. You can start by making extra repayments on your smallest debt and when you have paid it off move on to any other debts. A credit card debt of $2000 could take you over 12 years to pay off and cost about $2150 in interest, if you only pay the minimum repayment. If you are one of the 36 per cent of Australians who say they use their credit card for Christmas spending, ASIC’s credit card calculator will help you see how much time and money you can save by making higher repayments.

3. Create a savings balance
Having a healthy savings balance gives you breathing space to deal with life's ups and downs, and means you won't have to borrow money if something unexpected happens. If you are looking to save for something specific in 2018, such as a holiday, having a savings plan in place is critical to achieving your money goals. Use ASIC's MoneySmart savings goal calculator to work out how long it will take to reach your savings goals. A good tip for building up a savings buffer is to ‘set and forget’, by opening a separate savings account and making regular payments automatically.

4. Take stock of your insurance
Having the right insurance in place is a critical part of a financial plan, but it pays to shop around. It is important to review your existing policies to ensure they cover everything you want included and if they don't, you can find a policy that does. Make a resolution to compare the policies offered by other insurers when your home or car insurance comes up for renewal to ensure you get the best deal.

5. Maximise your super
Get to know your super and join the 77 per cent of Australians who know exactly or roughly their superannuation balance. You can do this by going to your super website or reviewing your super statement. If your super is spread across multiple funds you should consider combining multiple accounts to save fees. Making extra contributions and reviewing your investment options can make a big difference to your retirement funds. Use YourLifeChoices’ retirement planner to find out if your super savings are on track.

Are you planning to get your finances in order as a New Year’s resolution next year? How are you planning to start?

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    COMMENTS

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    Old Geezer
    20th Dec 2017
    11:20am
    1. Plan for my money is t spend it.

    2. Debt only have good debt that pays me to have it.

    3. Insurance is only as good as it's limitations. Old blokes like me are excluded by their limitations.

    4. My super balance changes so much that I can't keep up with it.
    Rae
    21st Dec 2017
    9:02am
    I'm there with you OG. Until some stability hits markets I'm just letting them run but spending the money I would have invested. It's a mugs punt out there at current prices in my opinion. I can't find value at all.

    I'm careful with insurance and get at least four quotes and negotiate prices lower.

    Keeping up with fund balances right now is pointless.

    I have debt as long as I have cash to pay it out if a call eventuates through a crash.

    Nice to up my travel to Platinum or Princess Grill.

    I used to feel it was such a waste of money and now I don't give a damn. Thank you LNP for that.

    20th Dec 2017
    12:36pm
    I can only add that a good financial adviser is the best place to start to find out what is needed as most people do not have the financial expertise to make the decisions necessary to succeed. I believe that the best financial adviser is the one recommended by friends or work colleagues who have had dealings with and are happy with. There is an old saying that most people don't plan to fail, they just fail to plan.
    Old Geezer
    20th Dec 2017
    3:10pm
    I haven't found a good one as yet.
    Anonymous
    20th Dec 2017
    3:34pm
    Keep looking OG. Just because you haven't found a good financial adviser, doesn't mean that they aren't out there. Ours has guided us to a position where we don't have too many financial worries. We were raised as frugal people and we don't waste our money but, by the same token, we do what we want to do whenever we choose to.
    Old Geezer
    20th Dec 2017
    3:55pm
    All the ones I talk too have little idea of what I am talking about let alone what I want to do. I feel like I am giving them an education on how things really work which is very different from what their textbooks told them how things work. They all seem to have the idea that everyone should get the OAP and arrange their affairs so they can. They are very surprised when I tell them I don't want the OAP or it's benefits.

    So it was up to me to learn the rules myself and play the game for myself.
    Tib
    20th Dec 2017
    1:28pm
    I don't owe anything. I make more than I spend. A long term financial is a little hopeful, and probably not necessary.
    Tib
    20th Dec 2017
    1:29pm
    Oops financial plan.
    Hasbeen
    20th Dec 2017
    2:09pm
    My advice on financial advisers is avoid then like the plague. My parents used 3, all highly respected, during 25 years of retirement, & each one cost them money.

    On insurance, be prepared to change them each year, unless there is an incredibly strong reason not to.

    A couple of years ago I found my current house & contents insurer offering me the same insurance, through a compare sight, for $250 less than my renewal offer. When I complained they renewed my insurance for the "NEW POLICY" price. Again this occurred last year.

    This year they have a note on the compare sight offer that this price is only for new business. They are actually admitting they plan to rip me off, & use the extra to subsidies new business. What a great loyalty plan. They are not the only one playing this game.

    As there is not only no reward for loyalty, but a penalty, they will get none from me. It obviously pays to be a NEW customer every year, so I'll be changing companies every year, to save about $250 each year.

    Don't trust an insurance any further than you can kick it, no matter how good their adds look.

    20th Dec 2017
    3:08pm
    My only financial goal is to end the year with at least as much wealth as I started
    Old Geezer
    20th Dec 2017
    3:12pm
    Now that would be one of my few bad years.
    Tib
    20th Dec 2017
    3:31pm
    OG Raphael might actually be spending his money having fun. :)
    Old Geezer
    20th Dec 2017
    3:45pm
    You don't think I will be too? My calendar is getting very full for 2018 now. Get the silly season out of the way and then I'm off having fun for most of 2018.
    Tib
    20th Dec 2017
    3:49pm
    OG don't miss an opportunity.
    Old Geezer
    20th Dec 2017
    3:57pm
    Nope I have too many invites to too many dos in 2018.
    Anonymous
    20th Dec 2017
    4:00pm
    What is the use of accumulating too much wealth in retirement ?

    A good year means you have more to spend on

    You enjoy your lifestyle Scrooge OG Mcduck, and I'' enjoy mine

    Next holiday - a 3 month trip to Europe on the cards flying Business class all the way and staying in 5 star luxury
    Rae
    21st Dec 2017
    9:18am
    Definitely the way to go Raphael. And I agree that not losing Capital is a fine aim. Love Europe.
    Old Geezer
    24th Dec 2017
    4:28pm
    It's more fun in youth hostels than those 5 star luxury places where everyone has their nose in the air.
    Disco Diver
    20th Dec 2017
    4:05pm
    I had a very good Financial Planner until he put me into things that went broke and bankrupt in the WFC in 2007 and lost me $480,000.
    I don't trust any financial planners any more, I do it myself and have never lost anything since then.
    I,m with you OG
    Old Geezer
    24th Dec 2017
    4:30pm
    I worked all that out way back in 1987 when I saw the smart people get out unscathed and the rest got to wear the losses.