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Six tips to get your 2012 finances in order

2012 has kicked off the same as most New Years’ do – with plenty of talk about setting goals and getting various aspects of your business in order. The trouble most people face is knowing where to start, so Brad Callaughan’s put together six easy ways to get the 2012 year off on the right financial foot.

  1. Review your wages or salary package

Even though you’re the business owner, you should still review your salary yearly. If cashflow permits, you should be looking after yourself in the form of remuneration and should also be paying an increased amount into your superannuation.

2.  Superannuation

As a business owner, why wouldn’t you want your own Self-Managed Super Fund? This gives you the opportunity to use your super monies to buy your office or factory building and start paying rent to yourself. By doing so, you’re increasing your wealth while building an asset you can sell and pay no tax on. Get the right advice on this area and start looking after your future.

3.  Insurance

Very few of us ever insure our biggest asset – ourselves. We can’t put a value on our life and very few of us stop to think about what might happen to our family after we are gone. Who’ll cover the mortgage payments? Will there be enough money to educate the kids? The best part about life insurance is that it can be paid for from a Superfund. So the excuse that you can’t afford it isn’t relevant, as your 9 percent contributions are covering your family.

Another insurance you might not have considered is income protection. If you’re a one income family, how can you afford not to have income protection? If you’re sick or injured and can’t work, how will the mortgage, food and other bills be paid? Simple – get income protection that will pay you up to 75 percent of your income.

4.  Credit card debt

Credit cards with 55 interest free days are great, but they’re not the way to run your business. The compounding interest means paying the minimum monthly payment isn’t enough to cover the total interest debt. If you have a credit card debt, use a balance transfer with 0 percent for 6 months and pay it off within the 6 months. If you aren’t disciplined enough for this you need to consolidate or refinance.

5.   Consolidate funds

By doing something as simple as putting all your loans into one at a single interest rate, you can save thousands over the year.

6.  Refinance of loan(s)

With interest rates in free fall and increased bank competiveness there has never been a better time to refinance or shop around for a better deal. This costs you nothing and can also save you thousands over the term of the loan.