Develop your own financial plan for 2015
If you’ve decided that 2015 is the year that you get your finances in order, you may be wondering where to start.
Have a read through our four steps below which will see you develop a plan to get your money working harder.
Step 1: determine your current situation
Get all of your online reports and paperwork in order to work out your current income, savings, debts and expenses. Once you know where you stand you can see areas that might need work (such as cutting unnecessary expenses or moving your savings to a higher interest account).
Step 2: set your financial goals
You might decide to investigate purchasing an investment property as a way to earn an income, or you may decide to sell off some old assets that are no longer paying dividends.
Whatever you choose, you need to be comfortable with the amount of risk involved. So even if you do seek advice, it’s always got to be your final decision. It’s your money after all.
Step 3: choose a course of action
In general, you can either decide to keep doing what you are doing, expand your current course of action, change or tweak what you currently do, or take a brand new approach.
Financial advisors can be helpful here as they are often aware of new ways to make your money work harder that you may not have been aware of.
You will need to determine what level of risk you are comfortable with in order to choose your course of action. For instance, putting money in a high interest savings account has very little risk compared to, say, investing in the stock market where the outcome is variable.
Step 4: re-evaluate and revise your plan as needed
Financial plans are not static, and they are continuously affected by factors such as interest rate movements, changes to your personal situation (for instance, becoming unemployed or moving overseas).
Be prepared to spend some time analysing your finances to make sure they are working as hard as you need them to be depending on your goals and situation