How to meet your financial new year’s resolutions
Clear your post-Christmas debt and get your finances in control in 2017.
January is a time for fresh starts and new year’s resolutions. Considering that December is Australia’s biggest spending season, these resolutions often revolve around getting your finances in control. In January 2016, Australians had found themselves with an average credit card debt of $1,668 each and it's likely that we'll hit similar numbers this year. So it's not surprising that, according to a survey conducted by finder.com.au in December 2016, 30% of Australians have set paying off their debts as their new year's resolution. Meanwhile another 24% plan to review monthly financial commitments such phone bills and health insurance this year. You can view the full list of the most popular resolutions below and check out our analysis of the top 10 most popular goals here.
Top 10 financial resolutions for 2017
|Pay off debt||30|
|Review monthly financial commitments such as phone bill, health insurance||24|
|Focus on a new career||15|
|Buy a car||15|
|Invest in a property||12|
|Donate more to charity||7|
|Graduate from a degree||5|
|Focus on getting a promotion||5|
As most of us know, setting the resolution isn’t difficult. It’s keeping it that is the hard part. On average, Aussies keep their resolutions for 93 days, suggesting that we lose motivation quickly. In fact, by the end of January 2017, more than a third of Australians will have broken their resolutions and four in five will have fallen over by July. So, what can we do to keep our resolutions this year?
The first thing you need to do is set a realistic goal. While it's great to set your sights high, you're more likely to lose motivation if your new year's resolution is too ambitious. This is especially true when consolidating credit card debt and setting financial goals for the new year. According to the finder survey, 65.8% of respondents planned to set more manageable new year's goals to increase their chances of success. Not only will it make it easier to meet your resolution, you'll also make progress quicker and be more motivated to meet your goal.
For example, let’s say you have a credit card debt and a mortgage and you want to get your finances in control. Rather than trying to pay them both off in full by the end of the year, focus on clearing your credit card debt (or whichever is most urgent) and continue to make regular repayments to your other debts. If you get a 0% balance transfer credit card to consolidate your debts, you could set monthly repayment targets to ensure that you clear the entire debt before the promotional period. You can use a similar strategy if you're using a card with 0% on purchases and want to repay your debt before the standard interest applies. This will break up your total debt into smaller chunks and make it easier to manage.
Breaking your larger goal into smaller steps will also help you keep track of your progress. According to the survey, 42.7% of Australians planned to track their progress to increase the success of their new year's resolutions this year. If you're consolidating a credit card debt, you can monitor your progress by working with a budget and paying attention to your monthly statement. This will ensure that you're paying off enough each statement period and give you the motivation to continue as you see your debt getting smaller each month. You could also use an app or reminder tool to track your progress, a strategy that 16.4% of Australians plan to use. You could use a reminder tool to flag your statement due dates and use your mobile banking app to keep track of your payments. If you're using a card with a promotional 0% balance transfer offer, you could also set up alerts to remind you how long you have left to repay your balance before the offer ends.
Accountability is also a blessing and a curse when executing new year’s resolutions. This is why 38.7% of Aussies plan will share their goals with family and friends and an additional 7.4% plan to post their goals on social media. While you might not want to share your financial predicaments with your social following, you could share your goal and monthly targets with a partner or friend. They can help track your progress and give you motivation whether you're making progress or falling behind. As well as accountability, your loved ones can give you the encouragement and support you need to complete your new year's resolution. For financial advice, you could also get in touch with a financial planner or your bank for advice for battling your debt.
With Christmas done and dusted and 2017 underway, now is the best time to consolidate your debts and get your finances in order. Setting realistic goals, creating a strategy and monitoring your progress are all key steps you need to take to make your new year’s resolution a reality.