Preparing Your Finances for 2025: A Year-End Checklist
As 2024 draws to a close, it’s the perfect time to reflect on your financial progress and prepare for the year ahead. Having a clear financial strategy ensures you start 2025 on solid footing. Use this checklist to maximise your income, optimise your savings, and secure your financial future.
1. Review Your Financial Goals
Before diving into the new year, assess where you stand with your financial goals. Ask yourself:
Have I made progress toward my short-term and long-term objectives?
Are my savings and investment strategies aligned with my current income and expenses?
Do I need to adjust my retirement goals based on market conditions or lifestyle changes?
2. Maximise Tax Opportunities
Taking advantage of available tax strategies can significantly impact your financial health:
Salary Sacrificing: Consider increasing pre-tax contributions to your superannuation to reduce taxable income.
Offset Your Income: Review investment properties, work-from-home expenses, or other deductible items that can offset your income for the financial year.
Capital Gains Timing: If you’ve sold shares or property, strategise to manage capital gains tax. For instance, holding assets for over 12 months may qualify you for a 50% discount.
3. Boost Your Emergency Fund
Economic uncertainty can arise, so having a robust emergency fund is critical:
Aim for 3–6 months' worth of living expenses in a high-interest savings account.
Pre-retirees should ensure their emergency fund includes anticipated healthcare and unexpected retirement costs.
4. Revisit Your Superannuation
Your super is one of the most powerful tools for retirement savings. Key actions include:
Check Your Contributions: Ensure you’re taking full advantage of concessional (before-tax) and non-concessional (after-tax) contribution limits.
Review Investment Options: Align your super’s investment strategy with your risk tolerance and life stage.
Consolidate Accounts: If you have multiple super accounts, consider consolidating them to save on fees.
5. Tackle Debt Strategically
Reducing high-interest debt is crucial, especially in a rising interest rate environment:
Focus on paying down credit card debt and personal loans.
Consider refinancing your home loan to secure a more competitive interest rate. Pre-retirees might explore offset accounts to minimise interest while maintaining liquidity.
6. Plan for Increased Income in 2025
If you’ve experienced a salary increase, bonus, or new income stream, use this opportunity to build wealth:
Automate Savings: Direct a portion of your new income into savings or investments before it reaches your spending account.
Invest Wisely: For HENRYs, this could mean exploring ETFs, property, or shares aligned with your risk profile.
Super Contributions: Empowered Women and high-income earners should consider using part of their increased income for additional super contributions to secure their future.
7. Insure Your Future
Review your insurance coverage to ensure it aligns with your needs:
Income Protection: Secure your income by ensuring your policy is aligned with your current level of income.
Life Insurance, Total & Permanent Disability & Trauma: Review your policies to avoid underinsurance.
8. Consult Your Financial Adviser
A professional review of your financial strategy can help identify gaps and opportunities. This is especially important for those transitioning into retirement or experiencing significant life changes.
Start 2025 with Confidence
Taking these proactive steps can set you up for a successful year ahead. By addressing your goals, maximising your income, and planning for uncertainties, you’ll build a strong financial foundation for 2025 and beyond.
If you’d like personalised advice tailored to your circumstances, contact us at Your Vision Financial Solutions today. Let’s work together to create a brighter financial future.
Your Vision Financial Solutions Pty Ltd ABN 64 650 296 478 and its Advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This article has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this article you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.