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Every New Year’s Eve, people talk about the changes they’re going to make in the New Year. Invariably it’s always a different take on the same resolution - to drink less, work out more, lose weight or eat more vegetables. But how many of us, when the clock strikes 12, vow that this year is going to be the year that we finally get our finances in order?

Even though NYE is now over, it’s not too late to sort out your finances (as well as your health). Here are a few tips to help get you started.

Set yourself a goal

Most investors will be happy to see the back of 2009, the year of the GFC, and welcome the possibilities that 2010 brings. And while nobody knows for sure what 2010 holds it’s important that you understand what you want to achieve this year. Are you saving to buy a house? Do you want to reduce your debt? Or do you want to plan for your future?

Once you know what your goal is, it’ll be easier to work out what you need to do to achieve it.

Reduce your debt

Now that Christmas and the New Year are over, it won’t be long before your credit card bill arrives in the mail. It’s probably a good idea to sit down and take a few deep breaths before you open your bill (or bills depending on how many credit cards you have). If your festive season spending has seen you rack up a debt the size of a small third world country all is not lost. There are ways you can reduce your debt.

If your only debt is your credit card, try paying it all off within the interest free period. If you can’t, try to at least pay off more than the minimum monthly payment each month. This will help reduce your debt sooner and reduce the amount of interest you pay.

If you have several different types of debt - home loans, car loans, store cards and/or credit cards - you might benefit from consolidating them into one loan. This can make your debt easier to manage (as you’ll be paying one repayment rather than many) and if you stick to your payment plan you could find that you’ve paid you debt off faster and saved a ton on interest. You should speak to your bank or a financial adviser to see if this solution is appropriate for your situation.

Draw up a budget (and stick to it)

In the age of credit cards and personal loans, many people fall into the trap of spending more than they earn. You don’t have to be Einstein to know that this way of life has some serious flaws!

Your budget doesn’t need to be fancy but it should show you what you earn and what you need to put away each week, fortnight or month to cover your bills and living expenses. The Government’s Understanding Money website (www.understandingmoney.gov.au) has some good tips on how to draw up a budget.

Check your insurance

You probably already have car, health and home and contents insurance but do you have life or income protection insurance?

You might not think you need these types of insurance and you might be right. But ask yourself this – if you died or were unable to work (either for a short period or indefinitely) would you or your family be able to manage without your wage? Would the mortgage and household bills get paid? Would the school fees or medical bills get paid? If the answer is no, life and income protection insurance can offer some piece of mind that things will be taken care of if the unexpected happens.

If you are considering taking out life and/or income protection insurance it’s a good idea to speak to your super fund. Super funds have a group policy which means premiums are generally cheaper than if you were to approach an insurance company directly. Also there are a number of tax advantages to paying your insurance premiums through your super fund.

Care about your super

If you’re serious about getting your finances in order, you can’t afford to overlook your super. Your super is supposed to provide a nest egg for you when you retire so it’s important that you do what you can while you’re still working to maximise your savings.

Familiarise yourself with your super. What’s your account balance? Do you have more than one account? Do you know where your super is invested? Are you entitled to a co-contribution? If you have no idea, you could be missing out on some great opportunities.

Consider consolidating your super accounts – If you have more than one super account it’s worth consolidating them into one. This way you’ll stop paying multiple fees and your super will have a higher base from which to grow.

Make an investment choice – The majority of Australian’s have their super invested in their super fund’s balanced investment option. While this may be fine for most, it’s worth reviewing your investment options to see if there’s one better suited to your investment horizon (the amount of time your money will be invested) and your risk profile.

Give your super a helping hand – Making regular or one-off contributions to your super account is a great way to boost your super savings. Plus, if you’re eligible you could qualify for a government co-contribution of up to $1,000.
 
Don’t be afraid to ask for help

If you find the worlds of investing, budgeting, insurance and superannuation harder to understand than an excited Scotsman (apologies to any Scottish readers), don’t be afraid to ask for help. Independent financial advisers can help you navigate your way through the different investing options, help you understand your attitudes towards risk and suggest a financial plan to help you reach your financial goals.

Again, if you need some help give your super fund a call. Most have arrangements with financial advisers and offer members discounted consultation rates.