The start of the year is the perfect time to not only declutter your home, but also to give your finances a much-needed freshen up. As you dust off the shelves and clear out the cobwebs in your home, spend time on your financial situation too. From reviewing your budget to cleaning up your credit report, setting or reconsidering your savings goals to organising your financial documents, now is the time to get yourself in a position to have more financial freedom and property ownership.
1. Review and re-evaluate your budget: Take a comprehensive look at your income and expenses and adjust your budget to align with your current priorities. Are there any unnecessary expenses that can be trimmed back? Or new financial goals you’d like to achieve?
2. Clean up your credit report: Request a copy of your credit report and scan it for any inaccuracies or discrepancies. Your credit score is an indication of how well you manage your money and repay your debt, and knowing your credit score can help you negotiate better credit deals or understand why a credit application may have been declined.
3. Revisit your savings goals: Whether you’re saving up for a holiday, to buy or renovate, or building up an emergency fund, consider automating a portion of your income to be directly deposited into your savings account.
4. Declutter high-interest debt: High interest debt can quickly weigh you down and even spiral out of control, leading to missed or late repayments that impact your ability to secure favourable credit in the future. Tackle credit card balances or personal loans with high interest rates, by prioritising to pay off these debts before they become an issue. Or consider debt consolidation strategies to reduce interest charges.
5. Explore mortgage refinancing options: With interest rates potentially on the rise, now might be the right time to explore mortgage refinancing options. Talk to an experienced mortgage broker to understand how refinancing could potentially lower your mortgage repayments or even shorten the term of your loan.
6. Evaluate your investment portfolio: Take this opportunity to assess your investments and ensure they’re still aligned with your risk tolerance and financial goals. Consider diversification and get financial advice on whether any adjustments are necessary.
7. Organise important financial documents: Organising your financial paperwork makes finding things easier, while having everything in one place will save you time and stress further down the road. Check that your mortgage documents, insurance policies, wills, and other vital records are stored in a way that makes it easy to access should you or someone else need to.
8. Book a home loan review: Navigating the complex world of mortgages can be daunting, so it pays to have the back-up of a professional mortgage broker who can provide personalised advice based on your financial situation. Book in a time to meet with your mortgage broker to review your current home loan and get mortgage advice.
9. Set realistic real estate goals: If you’re considering buying or selling property in the new year, whether it’s a first home, next home, or investment property, set realistic goals for the coming months. Spring and summer are typically busy selling seasons in the Australian real estate market, so having a clear plan in place will help you make the most of any opportunities.
10. Educate yourself continuously: Financial literacy is an ongoing journey, so use this season to continue to learn about new financial products, investment strategies, and money management techniques.
By following these tips and getting expert advice, you’ll be well on your way to making the most of opportunities in the property market, and achieving financial success.