Its the start of a new financial year, and if new calender years are anything to go by people will be making plans for the year about what they are going to do financially; be it improving their financial health, losing so of the weight of debt and just generally getting their finances in shape.
So why is it that this time next year there will be so many businesses and individuals in a similar, if not worse, position than they are in now?
Like their new calender year resolutions, are they just plucked pie in the sky claims and figures? Have they been unrealistic? Will some unforeseen circumstance befall them?
The key to being successful with your financial year plans is to make sure they are well thought out, have a solid base from what you know, and are not ridiculously ambitious ("I'll have my $200,000 mortgage paid off this year, despite my $80,000 income").
Where to start.
1. Have a household or business budget. Base it on what you know happened last year, and make sure you allow for increases in prices, especially electricity. Don't factor increases in income that you may not get; if you get it then there is some cream.
2. Review your debts. Just what debts do you have? Are you using short-term debt (eg credit card, overdraft) which has higher interest rates for funding long-term purchases? Have a mortgage broker run over your loan situation to see if there is a better option out there. And with loan exit fees now banned it could be a good time to move lenders.
3. Use your accountant for more than just your tax. They have a wealth of knowledge in finance and business, and are a great sounding board. Sure it will cost you something but what it may cost you otherwise in making an under-informed decision could be much, much more.
4. Consider yourself successful and talk about yourself as being successful. Its the power of positive thinking.
All the best for the new financial year.
And remember to call Cliftons - THE Business Specialists
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