As the world continues to deal with the effects of COVID-19, the new financial year is going to be challenging and volatile environment as the future seems uncertain.
This crisis has created doubt and threatens important goals – personal, organisational or economical. But in the midst of things every crisis lies great opportunity.
More than ever, now is the time to look at your financial set-up and make decisions relating to your savings and investments for better returns, insurance protection, and tax-saving to make your FY2020-21 financially stronger.
Here are 5 steps to help plan for the new financial year:
Set your financial goals – Take the time to set your financial goals and make sure they are well-defined and prioritised. Break goals into monthly or even weekly chunks so that you can easily measure your progress and don’t become overwhelmed.
Review your debt – identify your debt and create a plan to reduce your debt over the next financial year. Work out a monthly repayment plan of what you can afford to pay each month.
Evaluate your Insurance Policies – Check that you and your family are adequately covered in the event a life circumstance happens that requires a large amount of money to resolve. Your insurance policies should include health, auto, disability, life, home or rental, and business.
Maintain your Emergency Fund – it is really important to create and maintain an emergency fund. Ideally, you will have set aside 4 to 6 months of living expenses, in case of any unexpected circumstances. With the backup of this fund, you do not have to dip into your savings. Review your emergency fund at regular intervals and top it up in case of any shortfall.
Assess your Super – Review your super account and look at ways to improve it. Salary sacrifice can be a tax-effective way to boost your super account. The more you save for your retirement, the better off you will be in retirement.
The market will eventually bounce back but it is going to take some time. So use this time wisely to rearrange your financial goals and rejuvenate your savings and investments.