Make a financial health check part of your New Year’s resolution

When the long summer days of January roll around, it’s a perfect time to take stock of resolutions and get organised for the year ahead. Health, fitness and finances are always top of the list – but like many resolutions that look good on paper, thinking about finances can be overwhelming. The words ‘budgeting’ and ‘taxes’ might not get you excited, but this insight is a must-have summer read with six financial health check tips to help you make the most of your wealth in 2018.

Tick off wealth management as a resolution done right next year.

  1. Review your budget and plan for the unexpected
    January is when the Christmas bills surface, but is also the time to think about what the year ahead will look like financially. Put in some legwork now to prepare for unexpected costs and work out how you will fulfil your goals. You’ll need to ascertain core expenses and what can be trimmed or postponed if required, and work out how you will meet those big picture plans. Ensure you have a good cash reserve to smooth over unforeseen situations such as accident or illness, or a period of poor investment performance, especially if you are in the retirement planning phase.
  2. Make sure your bank is offering you their best
    Make your bank sweat for your business. Browse comparison websites for the best online savings account and term deposit rates, and then talk to your bank about what they can do for you. If they give you a better rate be sure to review this monthly to see how they’re going – don’t just set and forget. In this era of low interest rates, you should be regularly checking that your bank is doing best by you. An adviser can also help you look at strategies to make the most of your savings.
  3. Strengthen your investment portfolio
    Whether your investments are in a retail or industry super fund, a self managed super fund, a personal portfolio, or other entity; consider looking beyond traditional asset classes and diversify to reduce your risks and help you to meet your investment objectives. As an investor, it is important to keep abreast of market conditions so you can review and adjust your portfolio accordingly – form your own views on the short, medium and long-term prospects of your investments and the sectors they are exposed to. Make sure your portfolio reflects these views and changes with them. This can be time-consuming and complex, but a good adviser will help you navigate the investment process to make informed and confident decisions. For example, the global perspective and investment approach of the Investment Committee works because everyone thinks both for the clients and as clients – and our advisers then tailor these insights to clients’ personal situations.
  4. Review your super contribution structure
    For many Australians, super is the most tax-effective structure to build their retirement wealth – up to $1.6 million can be held tax free at retirement and amounts above this face a maximum tax rate on earnings of 15 per cent. Where appropriate, consider making pre-tax contributions to build your retirement wealth. Under the new rules you can make pre-tax contributions of $25,000 annually (for those under age 65, or between ages 65 and 75 who meet the work test). You are also able to make personal concessional contributions (within the above limitations), claiming the tax deduction when you complete your tax return. If you have savings and investments building up personally, consider whether you’re eligible, and if it makes sense, to make non-concessional contributions to your super. But the rules are complex – seek advice on the best strategy for your situation.
  5. Think about making or reviewing your estate plan
    It’s not something we like to have to think about, but documenting your wishes for passing on your estate is good to do sooner rather than later. When working through the elements of your plan, keep in mind that there may be a tax liability for your family when your death benefits are passed on. However, there may be strategies available to minimise these, so ensure you receive advice now to maximise the benefits to your loved ones later on. A professional estate planning lawyer, like the experts we have on board at Evans Dixon Law, can help you draft your will, choose your executor, execute your Power of Attorney, plan your successors, and decide whether you could benefit from using a trust in your succession plans.
  6. Chat to a financial strategy adviser or planner
    Careful management of your financial wellbeing is integral to building your wealth. Putting together and reviewing a plan with a professional will likely lift your chances of meeting your short and long-term financial goals. Although there is often a fee for the service, a financial strategy adviser or planner can provide a holistic approach to structuring your finances and has insights into important tax minimisation strategies that may suit your situation, giving you more flexibility to meet your goals.

At Dixon Advisory, we help our clients to identify, prioritise and achieve financial goals by assessing their overall situation and developing a customised strategy for long-term wealth creation and capital security in a tax-effective way – and our first client is still among the more than 20,000 families we support today. Our enduring partnerships are based on traditional client service – advisers who know you by name, understand your personal goals, empower you to take control over your decision-making, and are supported by global insights of balanced market analysis across a broad range of asset classes. 

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Madison Kennedy


Madison is a member of the senior leadership team in Canberra and has a breadth of experience in wealth management.

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