How To Keep Your Financial Resolutions For a Happy New Year

Monday, January 22nd, 2018

Are you one of those people who starts each new year with great intentions for a life that’s happier, healthier and financially better off? Join the club!

To help you stick to your financial resolutions for smarter money management in the new calendar year, there are some helpful tips at hand.

With a little bit of focus and some determination, here’s how to stay on track with some of the most popular resolutions around.

 

1: Setting a Monthly Budget

When it comes to better ways to manage money and not be caught out, planning to be better at budgeting and budgeting with provisions for an emergency fund top the list of most people’s money-related new year’s resolutions.

And it makes sense. Building long-term wealth is always a positive thing but having money on hand to tackle the ongoing expenses of your life is the main ingredient to stress-free living.

Step 1? Figure out how much you make. Sounds obvious, but it’s a figure that a lot of people, unfortunately, don’t know. And that leads to debt.

The number that matters each month isn’t your annual income divided by 12, or even your hourly wage multiplied by how many hours you work each week. The only amount that really matters is what’s left after you’ve paid tax and other income-related deductions, such as superannuation. What you have available to spend is the only money available to budget with.

Once that number is understood, you can work out what you spend and then look at the difference between both figures to work out ways you can trim your spending, or increase your earnings. Figuring out a way to do both at the same time is the best possible solution!

 

2: Creating an Emergency Savings Fund

What would happen to your lifestyle if you had no income to cover expenses? If you don’t have income protection insurance, knowing how those loan repayments are going to be made is an important thing to think about, not to mention food, petrol, utilities, rent/mortgage and all the other everyday expenses life throws at you. Ideally, a good emergency fund should have provisions for between 3-6 months. Knowing it’s there gives you much-needed breathing space that helps you sleep better. Promise!

 

3: Saving for Retirement

Maybe retirement seems like a long way off. Or maybe it’s closer than you realised.

Whatever stage you’re at when it comes to retirement savings, the truth is you will need money. And the more, the better to enjoy the life you love. Talk to a financial planner or accountant to see how you can learn ways to improve your retirement savings and see how your new-found budgeting skills can help provide more spare savings to invest in your own future.

 

4: Pay Off Credit Card Debt

Credit card debt hangs over the head of lots of Australians and it can be costly.

If you don’t meet those monthly repayment schedules, interest mounts and if you’re only paying the minimum each month, you’re not doing much to reduce the balance.

Get smarter with credit card usage and worrying about credit card debt will be a thing of the past. By applying the rule that if you can’t afford it straight away, you might not be able to afford it at all is a way to get you to stop, think and be careful before you splash out with cash you don’t really have.

 

5: Reduce Non-Credit Card Debt

Personal loans, car loans and home loans all come in very handy at times but managing your finances to pay off these loans in the fastest way possible is good money management that will help you have a happy year ahead. It all comes back to that budget; Get that right and you’ll have more money to spare to fast-track your loan repayments and reduce interest. Be sure to discuss your plans with your finance broker to make sure there are no penalties for faster payment to ensure you are saving.

 

For more financial savings ideas, talk to an experienced Loan Specialists at Loans Actually on

03 8805 1850

 

 


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