It is the start of a new year, and time to reflect back and look at ways to build up a surer financial footing. Here we discuss some great ways to better manage your budget this year and in the future:
1. Set your financial goals
Research shows you are more likely to achieve goals if you write them down, so if you're serious about revving up your finances this year, start with a clear plan of action.
Go through your plans, activities and financial circumstances from the past year and create a diary of what will be repeated or changed in the coming year.
Work out what financial goals you want to achieve, then break them down into realistic steps that will lead you there.
2. Reassess your personal budget
A budget is an essential tool to help you zero in on where you want your money to go over the next 12 months. Think about what daily, weekly, monthly and annual costs you can remove, even the seemingly insignificant costs such as takeaway coffee, snack food and nik-naks.
Track your expenses and train yourself to think about where your money is going and whether it’s necessary for it to go there. Perhaps even carry around a small notebook for a few weeks and make a note each time you spend money – when you tally it and take a good look you will probably be surprised to see why it disappears so quickly.
3. Take a good look at your loans, credit cards and other debt
If you feel burdened by debt, take a moment to imagine how good it would feel to pay off your personal loans and have no credit card debt.
Think about what you could do with all the money you currently spend on repayments. Visit us, your mortgage broker or use our financial plannnig services to see how to go about paying off your mortgage, personal loans and credit cards sooner or lowering your repayments.
Use these professional resources to first of all make sure you have borrowed within your means and then to work out what you can really afford as a regular repayment.
You may find debt consolidation is a potential solution. Above all, remember that you need to have an enjoyable life. Your savings, your sense of achievement and your property should add to your happiness.
4. Take a free home loan health check
The Australian mortgage market becomes more competitive every week, with new and existing lending institutions vying for consumers’ dollars.
This means there is a wider range of mortgage products out there for a broader range of borrowers. If you are currently a mortgagor you may be surprised to find a better loan out there – whether that is because it has more features and benefits or a lower overall cost.
As a reputable mortgage broker we do not charge customers for service so you have nothing to lose by making sure you are doing the best thing by your budget in respect to your mortgage. Call us today on 83425688 or fill out the appointment form in this page for your home loan health check.
5. Start a new savings account
Are you planning to save for something special this year? Maybe you want to take a holiday, upgrade your car, or build an emergency savings fund.
Whatever you're thinking of, now is the time to get your savings going. Start a new savings account with a high interest rate that is easy to deposit into but hard to withdraw from. This will help you save for a property or vehicle deposit, or to pay off lump sums on your mortgage or other debt.
Consider boosting your balance by setting an automatic recurring payment to regularly transfer money into your account.
If you save $20 each week, you will end up with over $1040 plus interest by the end of the year. Not an amount to be sneezed at!
6. Fixed repayments are luring
Some lenders have started to increase their variable home loan interest rates. As an alternative, fixed rate loans can provide peace of mind, keeping repayments stable over a fixed term.
However, there may be fewer features on offer and you may incur significant costs to break and switch from the loan.
Variable rate loans tend to be more flexible with features and the interest rate, but you must be prepared for rate rises. If you want to hedge your bets and take advantage of pros from each rate type consider splitting your loan between fixed and variable.
Above all, be honest with yourself – have a long think about where you went wrong in previous years. Think of ‘money and mortgage management’ as a positive learning experience, a technique to hone, rather than ‘mission impossible’. Changing your thinking may be all you need to succeed with your finances and live life with more freedom.