There's no better time to get your finances in order than at the beginning of a brand New Year.
I understand that January is often a difficult month, paying off Christmas credit card debt, and for some, sending kids back to school. However, having a plan, which outlines your goals and putting together a simple household budget can go a long way towards helping you take control of your finances and achieve your financial goals in 2014.
Check out my top 5 tips to help you get your finances in order this year:
1. Cut down or cut out unnecessary expenses: Review your ongoing bills and expenses and determine if any of these can be cut down or even better, cut out. You'd be surprised at how much you can save if you cut out takeaway coffees, meals out, e-tag expenses or pay-TV. And, during the Summer months, you may even benefit from suspending your gym membership. Resolve to stay fit by exercising freely in the open air with friends or your favourite 4-legged friend. Cutting down on all these little expenses can equate to big savings in the long term.
2. Take baby steps with your budget: Whilst it's great to have a long term budget, planning ahead for a full year can sometimes be ineffective because there are often so many variables and 'unknowns' that pop up throughout the year. I recommend setting an annual plan, but reviewing it monthly or in line with your payment cycle. This way you can quickly update your expenses and amend any future estimates, in turn giving you a more accurate budget and the best possible chance to achieve your end goal.
3. Review your savings accounts: Understand what fees and charges are associated with your savings accounts and then check out what the competition is offering. There could be a better banking option for your particular circumstance. Minimising fees and maximising interest rates will mean more money in your savings account.
4. Pay off or cancel expensive debt: It goes without saying that credit card and store card interest rates are significantly high. If you're using a credit card regularly, and not paying it off before the 'interest free' period, the interest simply accrues and before you know it, you're in a vicious cycle of debt. It's important to pay off credit card and store card debt as a priority and where possible, cancel it or reduce your credit limit as soon as possible in order to avoid temptation - we're all guilty of it. Most lending institutions now offer debit cards as an alternative to credit cards, so you can make secure online and telephone purchases and payments without the high interest rates associated with a typical credit card.
5. Get a better deal: Every day I come across people who are paying more than they should on their home loan, insurances, utility bills and more. Understanding your options via your Mortgage Broker or comparison websites such as HelpMeChoose.com.au can really help you find the best solution for your circumstances and importantly, save you money.
For more budgeting tips and home loan options contact the team at Mortgage Choice in Melbourne on 8602 6777.