The new financial year is in full swing – end of financial year craziness is slowly easing and we can all breathe a deep sigh of relief. The new financial year should come with its very own set of new year’s resolutions and promises for improvement in our lives… but similar to that diet that we forget about around the 5th of January, it is often easy to break these new year’s resolutions and fall back into old habits. Here are some of our tips to sticking to your financial resolutions and being financially savvy.
1. Set a budget:
The golden rule!! Without a budget, you are blind to your outgoings. You need to not only track what you are currently spending, but also create plan how much you will allow yourself to spend on a weekly basis. The easiest way to do this is go through 3 months worth of old bank statements and track your expenses to get a proper understanding of your outgoings.
Now you need to be tough on yourself and create a (realistic) household and personal budget that doesn’t deprive you, but ensures that you are smarter with your money.
2. Set realistic and achievable goals:
Setting yourself vague and nonspecific goals is the fastest way to lose sight of your new year’s resolutions. You are more likely to stay focused on your goals if you break them down for yourself and set achievable and measurable goals. For instance – you would like to pay extra money off your home or car loan… rather than setting the goal “I want to pay more off my mortgage/car loan this year”… set the goal of putting an extra $50 a week onto the mortgage/car loan. The simplicity of the goal will help you to be motivated to stick to it and give you an action plan of how to reach the target. Just make sure that you are setting realistic goals that you are able to keep and not overextending yourself.
3. Reduce financial waste
Everyone is guilty for having financial waste somewhere in their lives – we have a gym membership that we never use, pay for parking because it’s easier than walking or buy lunch everyday from the local coffee shop rather than bring our own. Financial waste (even on a minor scale as mentioned above) all adds up and is costing you lots of money over an annual period. Decide what you are guilty of and take steps to cut it out of your financial diet.
Financial waste doesn’t stop at the frivolous everyday spending but can also be applied to larger financial burdens. Utility, phone and internet providers for instance – often we just go with a provider that we are used to rather than the most cost effective. Shop around and get the best deal that suits your needs. It is important to examine the things in your life that are costing you money and find ways to reduce these costs.
4. Be Organised:
Finally, being organised is integral to getting financially ahead. Have a budget, keep on top of your plans to achieve your goals, keep your finances orderly and clear so that you can always have a snapshot of your progress. Planning out your weekly meals and making a shopping list will make sure that you only buy what is necessary, same with the pet store. Be organised and plan ahead – if you know that your annual insurances are due shortly, plan ahead and make sure that the cost is factored into the weekly budget from the get go. Failing to plan is planning to fail.
If you need help getting your finances structured to achieve your goals this financial year, call Solid Investment Property on (03)9690 2666 for more information.