7 new years resolutions you can keep!
As 2012 draws to a close, it's time to consider your options for 2013. Here are our top tips to getting your finances under control for the new year.
1. Get organised
Have a look at your income and expenses. You bank statements are a good place to start. Write everything down in a spreadsheet and use the built in calculation functions to do the math for you. Find out how much you have in your savings accounts, transaction accounts offset accounts, if you have them, and the balance owing on your credit card. From here you will have a clear picture of where to begin 2013.
2. Create a plan of action
Write down on a piece of paper what you hope to achieve financially in 2013. It helps to have a clear understanding of what you want to achieve in the new year.
Do you want to pay off your credit card, or buy a car, or even save for your first home? It is crucial to write down your key goals so you don't lose sight of your new year's resolutions.
3. Cut down on unnecessary spending.
The majority of people love a coffee in the morning, or as an afternoon pick me up. The average cost of a cappuccino in Sydney is $3.47. Not that much in the small scheme of things, but if you have two coffees a day each day of the working week, it adds up - almost $25 a week in fact. Over the course of the year you will spend over $1500 on coffee alone - that's a week's work for some. Instead of buying a takeaway, make an instant coffee instead...it might not taste the same, but an extra $1500 in your wallet would make your savings go further.
4. Pay your bills on time
We all have bills we need to pay. Whether it be electricity, mobile, rego, insurance...the list goes on. But have you noticed that each of your respective utility companies charge a late payment fee?
Create a calendar entry in your favourite email program, or mark it on a printed calendar when each of your bills are due. By knowing when each one of your bills is due, and paying them on time each month could save you hundreds in late payment fees. Direct debit is also a good option. Set it up so your bills are paid on the day you get paid; this way, you won't notice the money leaving your account and you won't miss a payment.
5. Sell your junk!
One mans trash is another mans treasure. It's an old cliche, but it still rings true. If you have old brickabrack laying around your house, you could consider selling it. This extra cash could go into your savings, or pay off a large chunk of your credit card debt. And de-cluttering your home can be as good as holiday.
6. Refinance your mortgage.
Switching mortgage providers used to be seen as a complicated task. Now, with the abolition of exit fees it is much easier than it used to be. Did you know, that by switching to a lower interest rate you could save yourself thousands over the lifetime of your loan?
Calculate how much you could save per month by switching loans.
7. Clean out your credit cards
The majority of Australians with credit card debt have not compared their options. If you haven't considered a balance transfer to a 0% interest rate, 2013 is the time to act.
Balance transfers work by taking your existing credit card debt to a new provider, and paying a minimal, sometimes zero percent interest rate. It's easy find out how much you can save with our balance transfer calculator.
If you create a plan and stick to it throughout the new year, taking control to your finances will be a breeze. If you write down your goals and follow our tips, you'll be able to tackle any financial situation in 2013.
Merry Christmas and Happy New Year.
Jeremy Cabral
Bonus Tips
Write down your financial goals
Putting pen to paper (or black letters to a white screen in a saved file) is an important part of making a plan. It is much easier to change your mind if you simply declare a resolution, but once you record your plan you are indicating to yourself that this is something longer lasting, something that you want to achieve, and are willing to refer back to.
For some of you, you might also want to write some of the key points from your plan into the inside front cover of your diary organiser, or on a post-it note by your desktop computer or maybe write it in a white-board marker across the top of your mirror so you see it every morning.
Ask yourself: What are you happy to cut out of your spending
This might sound obvious, but sometimes we have to remind ourselves that to reach new goals, we have to let some old things go in the process of making new things happen. Once your new financial goals are written down in a specific and achievable format, it’s time to decide which specific things you are willing to give up to make room for the new.
One way to start is by thinking of ways you spent money in 2011 that didn’t really feel worth it in the long run – are there gym memberships you didn’t use? Or clothes or consumer items you didn’t get as much enjoyment out of as you expected you would when you were at the check out? Maybe half the groceries you buy end up getting thrown away, which means you could cut down your food spend? Or is it something more significant, perhaps you are willing to give up your holiday for just one year to help make your goals possible?
Create some new habits
It only takes three weeks for your brain to form new habits, so if you set your goals right now, and start putting new daily habits in place to check in on yourself to make sure you’re on track, then by the end of January it’ll be a new habit and will become a quick and easy part of your day. This will put you on automatic drive for success.
Put any spare savings to work in a high interest savings account. You could be getting up to 6.11% p.a. interest on your savings..
Review your everyday banking account – are you paying any monthly account keeping fees? There are plenty of fee free banking accounts that come with the benefit of debit card access and have $0 monthly account keeping fees. These include the Citibank Plus Transaction Account and the NAB Classic Banking account
Investigate the costs of switching your home loan if you are getting charged a high rate with your current mortgage. Some of the leading variable rate home loans are now in the low 6% p.a. range.
If you have a mortgage and your family would struggle to maintain their lifestyle in the event of your death, perhaps now is the time to review your life insurance and income protection policies.
