As the new year rolls in, it’s a perfect time for Australians to reassess their financial habits. Setting New Year’s resolutions is a tradition, but sticking to them, especially financial ones, can be challenging. Here, we’ll give you some practical tips to help you stay on track with your financial goals, whether it’s sticking to a budget, spending wisely, or refinancing loans.
Create a Realistic Budget
Start by creating a realistic budget. It’s essential to know where your money goes each month, which you can do by listing your income and expenses, (don’t forget to account for those occasional splurges!). Once you understand your spending patterns, set realistic limits on various categories. Use budgeting apps or simple spreadsheets to track your expenses. The key is consistency – checking your budget regularly helps identify areas where you can cut back and save.
Recalibrate Your Spending Habits
Smart spending is all about making informed choices. Before purchasing, ask yourself if it’s a need or a want – you should also look for discounts, use cashback apps, and avoid impulse buys. It’s also wise to review regular subscriptions and memberships – are they all necessary? Often, small savings can add up significantly over time. Prioritise spending on things that bring long-term value rather than short-lived satisfaction.
Consider Refinancing Your Loans
In the current economy, with rising interest rates, refinancing loans can be a smart move. The reduction in monthly repayments you might achieve can free up cash for other financial goals and give you some breathing room if required. However, it’s important to consider the terms and conditions of the new loan and any associated fees. Do your research, and consult with a financial expert like a broker to ensure refinancing is beneficial for your unique circumstances.
Build an Emergency Fund
An emergency fund acts as a financial safety net. Start by setting a small, achievable goal, like saving $1,000, and then gradually increase it. Ideally, your emergency fund should cover three to six months of living expenses. This fund helps in managing unexpected events like medical emergencies or job loss without derailing your financial stability. Beyond that, take some time to understand different personal insurance products and how they can assist in a crisis.
Leverage technology to help manage your finances – there are countless apps and online tools to help track spending, set budget goals, and even provide insights into your financial habits. Automate your savings if possible – set up a direct debit that transfers a certain amount to your savings account each payday. This “set and forget” approach makes saving effortless.
Setting Short and Long-Term Goals
Having clear financial goals is vital. Short-term goals might include saving for a holiday or paying off a small debt, while long-term goals could be buying a house or saving for retirement. Visualise your goals and break them down into manageable steps. Regularly review and adjust your goals as your circumstances change.
The Importance of a Financial Adviser
Having a financial adviser can be a game-changer. They bring expertise in managing finances and can provide personalised advice based on your financial situation. Advisers help in setting realistic goals (beyond the typical New Year’s financial resolutions!), understanding investment options, and creating strategies to reduce debt. They’re particularly valuable for those feeling overwhelmed by financial planning or seeking to maximise their savings and investments. Remember, an adviser’s role is to guide you towards financial stability and growth.
Sticking to your New Year’s financial resolutions requires discipline, planning, and crucially, professional advice. By creating a realistic budget, consulting a financial adviser, spending wisely, refinancing loans when beneficial, building an emergency fund, leveraging technology, and setting clear goals, you can take control of your finances. Remember, the journey to financial stability is a marathon, not a sprint. Take one step at a time, and you’ll be on your way to a more secure financial future.
If you’re ready to make 2024 the year that you set yourself on the path to achieving your financial goals, get in touch with the team at Priority Advisory Group on 02 9415 1611 or you can reach us via our website.