The holiday season spending is done. For families the back-to-school costs for the kids are biting now. The school fees will be due soon. The finances are tight. High inflation has made it tougher than usual. However, with a bit of luck, the financial pressures should start easing soon.

If that’s unlikely it may be time for a review of the financial plans. The beginning of a new year is also a good time to make a plan for the first time.

The first step is to decide on some key goals and objectives. Examples could include: save some money for next Christmas, or other expected costs, find a cheaper mortgage, check you have enough life insurance, build up super accounts, buy a new car without a big debt, or save for that overseas trip.  

With existing investments, the good news is that bank term deposits now pay four per cent interest. The bad news is that that is less than the likely inflation for the next year so money in term deposits will probably lose purchasing power.

A cheaper mortgage is a possibility. Do some homework on what other lenders are offering new borrowers. Some are bound to be cheaper than your current variable rate. Then talk to your current lender and ask for a reduction based on the lower rates others are offering.

Reducing and eliminating credit card debt can be achieved. The first step is to stop spending on the card, or only spend what you can repay in full within the month. Then budget a set regular payment to the card to gradually repay the debt over time. This will save a lot of interest.

The least painful way to save for next Christmas, a car, the big trip, or anything else, is by automatic debit into a separate bank account each payday. This will mean slightly less money available for spending but in time spending will adjust to fit within the lower income amount available.

Sacrificing some money to build up superannuation each payday works in the same way. Slightly less money is available in the pay account to spend. The contributions also save considerable income tax for most workers. While on super, why not compare funds and speak to an adviser about the best options.

Most people underestimate how much life, disability and income insurance they need. It depends on personal circumstances, but the default amounts in super funds are rarely enough. Speak to an adviser so you don’t get caught short.

Existing investments should be reviewed if that hasn’t been done recently. This can determine which are the most appropriate financial strategies and the best investment options to suit your individual circumstances.