All our New Year’s resolutions are centred on losing weight, exercising more or drinking less, however the new year is a great time to overhaul your financial life by putting in plans to help you get closer to your money goals and on the road to financial security and freedom.
Here’s our tips for a great financial year:-
1. Know What You Want
Have a clear, concise financial goal for the year.
It isn’t good enough to say, “I want to have my credit card paid down and more money in the bank.” Instead, you should write a financial resolution that is clear and actionable like, “I have the balance on my credit card paid down to $0 in six months time.
2. Set up a budget
Once you have established your financial goals, give yourself a timeframe to achieve them.
A budget will help you to map out your finances and work out where your money is going. Start with the essential costs like rent or mortgage, food, bills and transport, and then allocate money for the debts you are trying to pay off. Decide what proportion you will allocate to savings, considering any goals you want to achieve and your timeframe for reaching them. Anything left over can be added to your savings.
3. Knock off the Debt
Getting on top of your debt is key to your financial future. Prioritise and break down what you owe and then you can work on what you can pay first.
You may want to start making extra repayments on your smallest debt first. Once you have paid that off, move on to the next smallest, and so on. If you start small, by the time you get to your biggest debts you will be well equipped to knock them out.
Another good tip is to pay off the debt with the highest interest first.
4. Get Saving
Saving money can help you become financially secure and provide a safety net in case of an emergency. Set up an automatic recurring payment to regularly transfer money into a high-interest savings account that is easy to deposit into but hard to withdraw from.
5. Make Money Doing What You Love
Most people have something that they are passionate about.
One of the ways to enjoy your work is to do something that you enjoy or even make some extra money from that hobby. Find a way to do this and it will always be a pleasure and not work. Even better if you can do this profitably on a full-time basis.
6. Collect Your Change
Any time you pay for things with cash, only spend whole dollar amounts. If you go to the store and your purchase total comes to $67.40, pay $70 in cash and pocket the change. The first thing you should do when you go home is to put the money in a container. Think of it as a piggy bank for adults. If you keep this up during the course of the year, you are likely to save a good small sum.
7. Review your Insurance
The new year is a great time to review your insurance policies to make sure you are getting the best deal and your assets are adequately covered.
If you have been with the same insurance company for a while, ring around to others and see if you can get a better deal on your policy. Make sure any new items you have bought in the last year are covered.
8. Consolidate your Superannuation
2018 could be the year you get on top of your super. If your super is spread out across multiple funds, you are probably paying multiple sets of fees that are reducing your balance.
Start the year by consolidating your super into one fund so you pay less fees and grow your lump sum faster.
You might also think about contributing extra to your super in order to grow your balance.
By achieving financial and money goals will move you towards financial confidence and freedom. Put a good plan in place and commit to healthy financial habits which will set you up for success and make 2018 your best financial year.