Andrew Heath, principal of Mortgage Choice Richmond, offers five tips to get your money in top shape this year.
“I want to save more”. “I want to pay off my credit card”. “I want to cut bills.”
Does that sound like your wish list for 2014? If so, take a look at my five steps to get ahead with your money this year. Try one – or try them all, to add prosperity to your 2014.
1. Stop the leaks: Ever noticed how money slips away? One minute there’s a crisp $50 note in your wallet, and the next moment you’re left scratching for cash. The culprit is often minor, unnecessary purchases like a takeaway lunch each workday (which can set you back around $50 weekly). Or the premium subscriber TV package (around $70 per month). Or a whole range of other small value purchases.
These costs can be hard to recall. In fact, investment watchdog ASIC found only around 54% of Australians know exactly where their money is spent. So plug the spending leaks. Take a good look at your spending - keeping a spending diary for a week or two can help. Chances are there are plenty of areas where you can cut back. Something as easy as skipping the daily cappuccino can produce significant savings over time.
2. Think small: when budgeting We all know budgeting is good for our finances. But the idea of planning for a full year of spending can be daunting. Why not shorten your timeframe? Draft a budget in line with the length of your pay period – a week, a fortnight, maybe a month. This way you can update your budget quickly and see instant results.
3. Review your savings account: You work hard for your money; now make your money work hard for you. Review the rate you’re earning on your savings account to see how it compares to others on the market. For the minor hassle of providing 100 points of ID your money could earn a much better return.
4. Get serious about card debt: Credit card debt often pays for purchases that are here today, gone tomorrow. Yet it can attract interest rates of up to 20%. That’s why it’s worth giving top priority to reducing card debt this year. Think about a balance transfer offer; pay as much as you can off the card each month instead of sticking to minimum repayments; and leave the card at home when you hit the shops. Your bank balance will thank you for it!
5. Shop around, compare, save: With so much competition among lenders, utility providers and insurance companies, shopping around for the best deal on key financial products can be a big money saver.
Websites like HelpMeChoose.com.au can help - or pop in and see us at Mortgage Choice Richmond. We want to help Richmond home owners get more from their money this year. You can find us at 1/37 Lennox Street, Richmond. Call us on 45789904 or 0411 550 600 7 days a week, or log onto www.mortgagechoice.com.au/andrew.heath.