For those people who aren't in this quagmire, talk to your accountant and compile an accurate forecast of the taxes you’ll be needing to pay and the dates those payments fall due. This discussion may see you minimise your tax bill. Once you know what’s what, regularly put aside funds so the readies are to hand when you need them to satisfy your tax obligations. I personally religiously adhere to this practice. Getting a loan, including a further increase on the house mortgage to pay your taxes constitutes another “F” for fail.
9. Applying The Over Interest Bank Rule
If you have debt, be it consumer debt of any sort, and it’s attracting interest at a rate more than what the bank charges you on a 2 year mortgage, do you darndest to get rid of it. Pay it down. Your likely to save more money paying the debt off than you are having it sit in a bank savings account. If necessary, see if you can refinance it or negotiate down the interest rate. Irrespective of how you deal with it, get if off your balance sheet.
10. Avoiding The Quicksand
If you read Money Secrets 101 you’ll see I advocate putting money aside each time you get paid for (a) building an emergency fund and (b) establishing savings. It doesn’t matter how small the contributions are. The point is you get into the practice of putting money by automatic payment from every single pay packet so you don’t have to resort to high interest loans or the use of a credit card if and when those inevitable but unexpected bills hit.
11. Utilizing Plastic Fantastic
Credit cards have their place. They are a convenient form of payment and if used responsibly, can work to your advantage. Unfortunately, many people get carried away with their spending, ending up having to carry their monthly credit card balances over to the following month. Of course not being able to pay off your monthly balances in their entirety means you are incurring high interest charges which doesn’t help you one single bit in the race to get ahead. If you are in this position, utilize the repayment methods I’I've noted in Money Secrets 101. Always distinguish between a need and a want before handing over your card and note that use of the plastic is rarely, long term, fantastic.
12. Protecting The Future
Imagine this … you are sitting in a clinic where a doctor has just told you there is a chance of cancer. After a few minutes of shock, you start to think about your financial future. If this diagnoses turns out to be correct, you know you’re be off work for several months. This will cause an upheaval in more ways than one. Your ability to earn income will also be impaired. Your expenses however will continue. Bills will also multiply as you seek out the best health care you can possibly obtain to improve your chances. The bills won’t stop there either. You’ll need home help to cope. In a couple of minutes, your brain scorecards the financial impact this issue is going to have on your day to day life and on your future. Then you remember. It’s okay. You've got insurance to deal with all of this so you can put all you've got into getting better. Now read on.We all get annoyed by insurance but that annoyance is small fry compared with the hardship we will go through if we don’t have the correct insurances. By correct I mean the right insurance cover, with appropriate policy provisions, for the requisite quantum of cover we need, at the acceptable premium price. Right for us personally in other words. When you insure, you are insuring your current and future lifestyle. For you. For your family. Don’t neglect this. It’s just too important. A final point. Just like you have regular medical checks, have your insurance policies checked too so they remain appropriate for you.
13. Safeguarding The Family Silver
If you've done your job right on planet terra firma, you will leave being people who love you dearly. They will grieve for you. Don’t add to their grief by not having a Will or having a Will that is out of date or worse, one that can’t be found. Update your Will and if you have a Trust, ensure your Memorandum of Wishes is current as well. Finally, put your Will and other important documents in DocVault so they can easily be found by your solicitor.
14. Avoiding Taking A Ski Holiday
Medical science dictates that we are going to live longer than what we think. Do you have enough funds to last you until death do you part from this earth? If not, are you going to be spending the kids inheritance? A bit of pre-retirement planning can put you in a position of financial strength and avoid you dipping into your family’s inheritance. This in turn will mean you have more to leave your children, giving them a good head start in life. Refer to Money Secrets 101 on this point and how to achieve options for your retirement. It’s actually much easier than most people think.
None of the 14 points are exactly rocket science and most of them don’t require great intelligence or even technical ability to implement. All they require is a willingness to spend a little time endeavouring to make a better financial future for yourself. Unfortunately, many people hinder their own financial progress by failing to adhere to these basic points. Will you fall into this camp? Your decision. But don’t delude yourself. Not making a choice, not taking appropriate action, is actually making a choice. A choice not to live the optimal financial life you possibly can.
If after reading this blog you need help, why don’t you contact us. We’re here to help. That’s our job. In the interim, best wishes for an amazingly financially successful 2014 year.