Quick tips for reviewing your new year finances
With 2018 well and truly in fifth gear, it might feel as though the New Year has a jump on you. It’s never too late though to review your financial situation and why not now when the year is still young? Let’s take a look at some simple steps that can help you crack the whip on your finances and future goals.
Review your priorities
Ask yourself what financial strategies worked well in 2017? What can you do better in 2018? Have your priorities changed or are they still the same? How are your goals progressing and are you on track to achieving them? If your goals for 2018 are still a little hazy, take a moment to visualise where you would like your finances to be at the end of the year, and then work backwards to set your goals and the steps you need to achieve them.
Evaluate your mortgage
If you are serious about your financial goals it pays to review your mortgage regularly. Getting the right interest rate can significantly impact what you owe the bank. As interest rates change, you also need to be sure your rate is as competitive as it can be. If you’re not locked into a mortgage with early repayment penalties, it may be worth switching your provider to get a better deal. If your house price has risen in line with the national average, bringing your loan-to-value ratio down, it might mean you’re eligible for a cheaper mortgage – and who could say “no” to that? However, if you can achieve savings on your mortgage, consider repaying above the minimum repayment schedule; this could save you thousands in interest and years on the term of your loan.
Take stock of your pension
Regardless of your stage of life, it’s never too early or late to start or review a pension. The first logical step is to review what you think you will need in retirement. What age do you plan to retire? Has that changed since you last reviewed your pension and contributions? What debt will you have in retirement and what do you need to meet your repayments? If you’re aiming for a pension that pays half your salary in retirement, you should be saving approximately 20% of your salary, although this may change depending on how far you have to go before retirement. Consider how well your pension fund is performing, whether it is in alignment with your pension goals and if your fund’s fees and charges are acceptable based on what it is returning. There’s no point in rewarding an underperforming fund manager, particularly one that can take tens of thousands off your pension over the course of your savings journey.
Reduce your short-term debt
Credit cards, overdrafts and other short term debt can be crippling. Don’t be fooled by reports that our consumer debt is falling; it’s still the fourth highest in Europe. When you consider all those fees that bulk out short term debt repayments, they can amount to the equivalent of a sun holiday each year. Take courage and draw up a repayment schedule that focuses on clearing your debt; the savings you make in the future can go towards your mortgage to help get it paid off sooner, or to bolster your pension contributions or savings.
Talk to a financial advisor
If reviewing your financial situation feels at all daunting, you don’t have to go it alone. Our team at Hennelly Finance offers financial advice, support and even a free initial financial check-up, so getting 2018 off to a strong start doesn’t have to cost you a cent. To take charge get in touch with us today. Visit our website at hennellyfinance.ie or call us on 091 670 123.