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Annual financial check-up

Annual financial check-up 

As we step forward into the New Year, it’s also the perfect time to step back and take a look at our finances. Here are six reasons why.

Alot can happen in 12 months, which is why financial planners often recommend an annual review of your finances. It’s a regular check-up to ensure your money is continuing to support your desired lifestyle and wishes for your family in the future.

According to the Australian Securities and Investments Commission’s MoneySmart website (, an annual review with a financial planner should include discussions about any changes to your goals, personal circumstances, or financial situation.

As you look back over 2019 and think about the year ahead, ask yourself if any of the following instances apply to you. If so, the New Year is the perfect time for a financial check-up.

1. Major life events

Marriage, divorce, birth and death are four major life events that should trigger a review of your finances. They can all shift your income, expenses, assets, and priorities, and you’ll want to be sure your financial strategy is still appropriate.

Changing healthcare needs may be another reason to run the ruler over your financial arrangements. And if there have been any major changes in the past year, it’s good to ensure your estate planning strategy still reflects your wishes and circumstances as well.

2. Change ahead

Perhaps you know 2020 is going to be a year of significant change in your assets. It might be earmarked as the year to downsize the family home, sell an investment property, or shift from semi-retirement to full retirement, or vice-versa. Or perhaps it’s a year when aged care will be needed.

Changes on the cards for your children or grandchildren may have a knock-on effect for your finances too. If your children are getting hitched, buying their first home, taking time out of the workforce to start a family, getting divorced or enrolling their children in a private school, they may well turn to the bank of Mum and Dad for some financial assistance.

Before making any promises, it’s good to be clear how any gifts or loans might impact your own financial wellbeing. It’s also good to have a conversation about how to structure such arrangements to ensure your assets and family relationships aren’t put in jeopardy in the future.

3. Investment check

Market shifts and life changes may have created a need to check your investment strategy is still on track to meet your idea of a comfortable retirement.

Falling interest rates may have led to a need to create additional income, for instance, or your portfolio may need rebalancing, or you may have bought or sold an investment property. These are all reasons to review your existing financial arrangements.

4. Tax changes

Part of making sure your financial strategy continues to serve you well includes looking at the tax efficiency of your current savings and investments. In any given year there can be legislative changes that impact your tax situation, superannuation contribution limits, or Centrelink rules and benefits. An annual review helps you remain aware of how those changes may impact.

5. Cost-of-living creep

The New Year can be a good time to review your everyday spending. If you’re worried about keeping up with cost-of-living changes, start the year by going over bank and credit card statements and tracking your spending for a month. Those exercises will often highlight areas where it’s possible to cut back on areas of spending or make an improvement by switching providers.

It may also include looking at whether you’re eligible for any benefits as your life and situation changes.

6. Staying protected

Underinsurance can be a common issue. Our homes or investment properties can go up in value, for instance, but our insurance cover stays the same year in, year out. Maintaining your desired lifestyle means being adequately covered for the unexpected in life.