Keep those financial resolutions going all year with these 5 tips
Did you know that ‘saving more money’ is tied in first place as the most common New Year’s resolution each year? Alongside eating healthier and exercising more of course. While we know the other two tend to get dropped after a couple of weeks when you start to really crave that burger over a salad, or when a long Netflix binge marathon wins over a real marathon… keeping your savings on track throughout the year doesn’t always need to be a lost battle.
Once the Christmas period is over, we all tend to look at our finances and vow to make a change for the better for the next 12 months. No one wants to be in a situation where they need to rely on the credit card for those presents each year. If this was you, don’t worry! You’re in the same boat as all the Australians that racked up nearly $30 billion in credit card debt this Christmas period – a new record for us (according to finder.com.au).
Need a couple of tips to help you stay on track? We’ve got you covered…
The power of automation
The only ‘set and forget’ situation that we recommend anyone does! Set up your payments to automatically go into savings, and you’ll ensure you don’t even feel the hit when the money leaves your spending account.
Increase mortgage repayments
Paying your mortgage more often than monthly could potentially save you a few years and a fair amount of interest over your loan term. The interest on your loan is calculated daily, so if you make payments more often you’ll have interest calculated on the lesser amount. It’s a no brainer! Though you’ll need to make sure your bank won’t penalise you for extra repayments, especially if you’re on a fixed rate loan.
Focus on that debt
We’re not talking about home loans or your student debt here. We mean your pesky credit card debt that is often high interest and always has no reward for you. By committing to paying off more than the minimum until you put out that fire, you’ll guarantee you’re in a better position next year and the ones to come. If you commit at least 10% of your income (20% is better if you can manage it) to your credit card repayments, you’ll get yourself out of the debt hole sooner, and give yourself a real chance to begin building real wealth and savings.
Interest should interest you!
If you have a savings account that you’re contributing to regularly, you should know exactly how much interest your bank is giving you on top of your own money. With the arrival of more banks in the industry and more competition for the ‘big four’, we’re seeing some really great interest rates on savings accounts offered to everyday Australians. Do your research!
Prepare for the unexpected
We, unfortunately, can’t tell the future (how cool would that be though?), and sometimes accidents happen and you’re suddenly facing a stint with no income when the bills keep coming in. By making a commitment to put some of your income into a ‘rainy day fund’ you ensure your financial position won’t change when life gets in the way. Making it a goal to have at least three months of living expenses in the bank by the end of the year is a great way to make sure your finances are always in control.