New Year's financial resolutions
The New Year is a great time to implement some new financial habits. Kristen Hartnett, from The Salvation Army’s financial counselling program, Moneycare, shares three ways to make 2016 the year to achieve your financial goals:
1. Start saving
Have you heard of the 52-week savings challenge? The challenge works like this:
Week 1: Save $1
Week 2: Save $2
Week 3: Save $3 and so on.
After 52 weeks you will have $1378 saved. Another alternative is to nominate an amount you want to save on your pay day – and have this money transferred to a separate bank account. Automating your savings is the easiest way to achieve your savings goal. And make sure your savings are stashed away in an account that is difficult to withdraw from.
2. Reduce spending
The New Year is also an opportunity to get real about your spending. Look at your expenses over the past four weeks. (A lot of this can be found on your bank and credit card statements). Include everything – parking fees, bank charges, insurance, clothes, entertainment etc.
Then, work out where you can make some changes by completing the
I will reduce my spending on: ___________________________
I will stop spending my money on: ______________________
I will shop around for a better deal on: __________________
3. Live within your means
It is important not to spend more than you earn. A simple money plan can help you see what you are doing with your money. Go to moneysmart.gov.au
Your next step is to start paying for every-day expenses with cash, eftpos, or a debit card. The golden rule is to only use your credit card if you can pay it off in full at the end of the month.
And, when it comes to your large and irregular expenses (like car registration, electricity, insurance, Christmas etc), set aside an amount of money from each pay to cover these costs.
5 top budgeting tips for 2016
Use these tips to take control of your money in 2016 and make it go a little further:
- Make your bed
Did you know that people who make their bed are better at sticking to their budget than the non-bedmakers. This simple habit sets us up for other good behaviours.
- Use the 7-day rule
Delaying gratification is hard in our buy-now pay-later world. If you find yourself buying something on impulse, delay your decision. Wait seven days to work out if you really need the product.
- Shop around and negotiate
Your money is valuable. It pays to get three quotes on large purchases such as insurance, mobile phones and electrical items. Always negotiate on price.
- Read your bank statements
Look at your bank statements and see if you have any unexpected automatic payments happening. You may be paying for a product you no longer need or use.
- Don’t give up
Stick with your budgeting because it gets easier over time. Perseverance pays and making some positive changes is better than making none.