Do you make New Year’s Resolutions?
How many do you live up to?
If you are like most people, you will make a whole lot of promises and by about 14 January, you will have forgotten them.
How about making some financial resolutions instead?
The best way to stick to them is rather than saying on December 31 “I want x” – be more specific. Set a date you want to achieve the resolution by. Be specific and be clear about what you are out to achieve. Most importantly, write them down and structure them like this:
By x date I will achieve x goal. The benefits to me are:
Here are some ideas of what you can try.
Review your mortgage
If you have not looked at your home loan options for more than two years, chances are there is a better option out there. You could find significant savings are available to you. Perhaps you have other debts you need to review as well. Go and see your local mortgage broker to discuss your options. We can refer you to a reputable broker if you need help.
52 Week Money Challenge
If you have no debts, this can be a great way to build up additional cash reserves.
For many people, January is the month when the least expenses come out of the household budget. Flip the chart around and put $52 away in the first week, $51 in the second week, etc. By the time you get to December, you will have a small amount you need to save to stay on track.
Save your spare change
Did you know that a 600ml drink bottle can hold approximately 440 $2 coins? – That’s $880!
Find somewhere you can put your spare change – a jar, an old drink bottle, a money box. Rather than having coins rattling around in your pockets which provides temptation to spend what you have on things you don’t need, whenever you get home, clean your pockets out and put the coins into a container. You would be amazed how much you can accumulate!
Use a yearly planner to map out your bills and expenses
We know we get regular large bills like Rates, Car Registration, Water, Electricity and many more. Often if you have forgotten about it, these bills can come as a rude shock. Simply putting the approximate date you need to pay these large bills in a calendar can make a huge difference to being able to pay them on time.
Break down large expenses into smaller more manageable chunks
Some bills are predictable. If you know you regularly pay $600 every 12 weeks for electricity, set up a weekly debit from your bank account for $50 each week. For other bills, you can establish another bank account and transfer a small amount of money each week. By the time the bill becomes payable, there are sufficient funds to cover your other upcoming bills.
Start an investment savings plan
You could commit to putting an extra amount into a new investment plan or into superannuation. Putting additional money into superannuation can be done through your employer. This is a good option if you are unlikely to require the funds until you retire. Be sure to check contribution caps and get advice on amounts if needed.
If you are likely to require the funds before retirement, you can generally establish a regular savings plan outside of super (into managed funds or direct shares) with as little as $500 per month. This can be a good way to start earning an additional income over time as some investments will pay a dividend or distribution on a regular basis.
Aim to pay down your debts
If you have several credit cards, chances are that at least one of them will always have a balance outstanding on it. If this is you, a New Year’s resolution could be to repay the balance and cancel the card within the next 6 or 12 months.
Engage a financial planner
Recent studies have shown that people who engage a financial planner on a regular basis for advice and management of their financial future are happier with their lives and have a better financial outlook than someone who chooses to manage their own affairs. A financial planner can assist you in identifying risks and opportunities you would have otherwise missed.
Authorised Representative of Aon Hewitt Financial Advice Limited
Authorised Representative No. 324789
Aon Hewitt Financial Advice ABN 13 091 225 642 AFSL No. 239183
This information may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.