Plan Better So You Can Invest Well in 2015

Financial planning, investing, debt management, and knowledge and education are important considerations when getting your finances in order, and planning to set up your financial independence for later in life.

With this in mind, I have put together my Top 10 Financial Resolutions that you should put into practice this year.

Financial Planning

1: Set a Financial Goalmoney

The first thing you need to do is to set yourself a financial goal.

It should be specific and quantifiable, so you can focus on your financial priorities and know what your end goal is – what you are aiming to achieve.

Your financial goal could be anything from setting a savings target, to reducing debt or building an investment portfolio.

2: Create a Budget

A budget is an important part of your goal setting process, and it will help you assess how realistic and achievable your financial targets are.

Your budget should be detailed and take into account all of your income and expenses.

It can be used to help predict your financial future, and identify how much spare cash you’ll have to save, invest or use in other productive ways.

It will also reveal if you are spending more than you are earning, and help identify ways you can close your spending gap.


3: Set an Investment Strategy

strategy-designHaving a clear investment strategy gives you a clear line of sight about what type of investments you are comfortable with, and those you wish stay clear of.

You also need to think about the makeup of your investment portfolio, however big or small it is.

For instance, do you want to invest in one asset class like property, cash or shares, or spread your risk and invest in multiple assets?

Remember, the higher the return, the higher the risk.

You should also consider your liquidity requirements.

That is, do you want quick access to your cash (like that offered by savings accounts and listed shares), or are you happy to have it locked away in a less liquid investment (like property or long-term deposits)?

4: Establish a Savings Plan

Saving money is a good habit to get into. Before you know it, you can have a nice little sum of cash saved away that you can use towards achieving your financial and personal goals.

Savings are also a great form of insurance in case an unexpected event occurs – like a big ticket expense, unemployment or long term illness.

A good rule of thumb is to try and save about 3-6 months’ worth of your everyday living expenses, as buffer just in case.

For example, if you are spending $4,000 a month on food, clothing, utilities, rent/mortgage payments, you should try and save between $12,000 and $24,000 to give yourself breathing space incase the worst happens.

5: Focus on Superannuation

Take the opportunity to assess how well your super fund is performing and whether you are getting the best value for money.


Compare funds, fees and products to see if you might be better off investing elsewhere.

If you have multiple funds, consider consolidating them.

However, make sure you get advice before rolling over any funds because your benefits may be affected and there could be transfer costs involved.This will make it much easier to keep track of your money and you will only be paying one set of fees.

You should also take the opportunity to search for any missing superannuation accounts in your name.

A good place to start  doing this is online with the ATO’s Superseeker service.

Debt Management

6: Review Spending Habits

saving_piggy_bank__largeIf you think you may have bad spending habits, now is the time to review them and move into more positive territory.

Bad spending habits can include things like living beyond your means, buying everything on credit (and racking up big credit or store card debt), impulse buying, and getting seduced into thinking you’re saving money when you buy things on sale – let’s be clear, whenever you buy something regardless of price, you are spending and not saving.

This is where you need to distinguish your needs – essential things like food, clothing and rent, from wants – things that are nice to have but you can do without, like expensive holidays and designer clothes.

Your budget will help you identify and cut down your spending on the things you want, and show you where you can use your cash saved for more productive purposes – like expensive debt reduction.

7: Reduce Credit Card Debt

Speaking of expensive debt, if you owe money on your credit card (or cards), aim to pay it off over the next 12 months – or sooner if possible. Interest charged on credit cards can be upwards of 20%, so it is a costly form of finance.

You should list out all your debts (e.g. credit and store cards, car and personal loans) and put together a debt reduction strategy, starting with the most expensive debt first.

Once all of your debt is paid off and under control, resist the temptation to rack up more debt. Instead, spend wisely, pay cash wherever possible and cut up unnecessary cards.

8: Get a Home Loan Health Check

You should check whether your home loan is meeting your personal and financial needs about once a

Compare and contrast your current loan’s features, flexibility and cost (interest rate and fees) to make sure you are getting the best deal.

If you have borrowed to invest, check that your loan meets and supports your investment strategy and time frame.

You can research the market yourself by jumping online and visiting various home loan comparison sites, talking directly with your lender or other lenders, or appointing a mortgage broker to do the leg work for you.

Aligned with this you should also check that you have adequate insurance like home, contents, car, health and life insurance. These help protect you and your family, as well as your valuable assets.

Knowledge and Education

9: Improve Your Financial Education

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It would be wise to read widely, undertake regular research, take head of what the independent experts say and enrol in courses from reputable training organisations to understand and improve your finances.

You don’t have to turn yourself into a financial expert but it is important you have a sound understanding of debt management, investing and saving.

Whilst you may not have all the answers, it is important you are able to ask the right questions and form a considered view on any advice you get.

If you have kids, start thinking about their financial education as well as yours. You are never too young to learn. And remember, you are their financial role model so make sure you teach them good habits.

10: Seek Independent Advice

There will always be times when you should, and must, seek independent advice – especially for big ticket investments and borrowing decisions. Don’t feel as though you have to go it alone.

You can get help form a variety of sources – financial planners, accountants, tax, property and legal advisers, bankers, lawyers and research firms to name a few.

Make sure you use their expertise sensibly and consider their advice in line with your own knowledge and experience, as well as what feels right.

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Peter Boehm


Peter Boehm was the Finance Editor for & has more than 30 years' experience in banking and financial services - Visit

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