Happy New Financial Year
The new financial year is a great time to assess where you are, and where you are going. Sure, financial new year’s resolutions aren’t as much fun as those made on the first of January, but they are important for taking stock of your current situation and setting yourself up to achieve your goals.
About those goals. Now is a good time to set some if you haven’t already. What are your priorities? Do you want to own your own home or build your investment portfolio? Travel? Retire? Commit to your Start-up? Save an emergency fund? How much money will you need to save to make it happen?
Do the sums to set your savings goal then match it up with your current income and expenditure. What do you earn? What do you spend? In a cashless society it is easy to lose track, particularly of discretionary spending on a coffee here, a pizza there, in-app purchases, a few shirts on sale, a sports bet or two, an ebook for the train, and so on. Knowing where your money goes is a big part of getting your finances on track. Download a cash tracking app to help you determine what you spend, and where you could spend less.
If you have credit card debt, interest repayments are probably draining your bank account. To get your finances on track you need to get your credit card under control, because they tend to have interest rates hovering around 15 percent or higher. Transfer the balance to a credit card with zero percent interest and commit to paying it off within the honeymoon period. Once the debt is gone, cut up the card and switch to a debit card. That will provide the convenience of a credit card, but without the temptation of spending money you don’t have.
Do you already have a home loan? Interest rates are at record lows, so if you are still on a relatively high rate, ask your lender for a better deal or refinance your home loan. You could save thousands of dollars and cut years off the term of your loan. Use the loan features to your advantage, such as having your salary paid into a mortgage offset account to minimise the interest you pay.
Plug any leaks in your budget, such as subscriptions you don’t need but might have forgotten, like online gaming or news sites, gym membership, or disused phone plans. Redirect this money into paying off your credit card or straight into your savings account or mortgage offset.
This might sound like a lot of effort, but really it’s only four steps. If you achieve one a month, you’ll be financially fit by summer.
By Marie Mortimer. You can follow Marie on Google+
Image credit: www.planetofsuccess.com/blog/