While 2019 has been in full swing for a while now, another change of the seasons is upon us. Summer is well and truly over and things are finally starting to cool down. This is a great time to reflect on how far you’ve come this year and to consider whether you can make any positive changes towards a brighter financial future in 2019.
Take some time to get to know your financial goals. Are they in need of a refresh? How will you prepare your spending for the rest of the year? Most importantly, are you on track with your savings and debt payoff goals? If not, now’s the time to make the improvements you’ve been waiting for.
Even small steps mean making progress towards a brighter financial future. If you want to make meaningful advances forward, you need with the right planning and the right goals. Here are concrete steps you can take now to continue creating a brighter financial future in 2019. Even if your first few months of 2019 haven’t been very successful for your bank account, you can still turn it around. This new season is a fresh start. Challenge yourself to achieve more.
1. Set SMART Savings Goals
Goal setting is a common practice when you’re trying to create a brighter financial future, but do you know what makes a goal successful? You need SMART goals, and these goals have a specific set of guidelines. They are:
These goals can be applied to anything, from your career to your savings. When you’re creating a savings plan, you need goals that you can track and measure along the way. These can be related to debt-payoff, saving for retirement, or even just putting money towards your emergency fund.
How do you know if a savings goal is SMART? First, know why you’re setting the goal and be specific. How will you measure if you’ve reached your goal? Is your goal realistic and achievable within your time frame?
For instance, instead of simply saying you want to save extra money each month, be specific. Your goal might instead be to save an extra $100 each month towards your emergency fund until you’ve reached $1000. Here, you have a time limit (it will take 10 months to reach $1000), and a goal you can measure (reaching $1000). A SMART goal like this is achievable and concrete.
2. Start Modest with Your Savings
There’s a lot of pressure in the financial wellness community to go big or go home with your savings. Adding only a few dollars to your savings account each month might not feel enough, but every dollar you put away is a dollar you didn’t spend on something frivolous.
Whether you’re saving 1% of your income or 10%, remember how far you’ve come. You’ve had to make room in your budget for these extra savings and it’s shown a commitment to your financial future. Taking this first step is something to celebrate.
You’ll quickly discover that saving isn’t sexy but it can be addictive. Once you get started, it will be much easier to continue saving, putting money towards your debt and you’ll get that much closer to your SMART goals.
3. Automatically Track Your Spending
Do you know what you’re spending your money on every day? Even if you’re being careful about unnecessary spending, it’s important to take a hands-on approach to your daily money usage. This doesn’t mean you should develop any negative feelings around your daily habits since these can lead to guilt but be proactive with your tracking.
Nowadays, automatically tracking your spending is easier than ever. With good money managing apps, you can automatically organize your spending into categories to monitor your budget. It might surprise you how much you’re spending on fast food or how expensive your shopping hauls are. This might not be a bad thing but you should take a few seconds each day to check in with your spending to stick to a budget without the stress.
4. Hack Your Impulsive Purchases
One of the most common barriers to achieving financial goals is overspending. Unplanned purchases sometimes are necessary but when they’re made impulsively they can derail your journey to a brighter financial future. You don’t have to accept these purchases as a normal part of your life.
There are a few different tricks you can use to “hack” your impulsive purchases. If you know you’re prone to impulse shopping because it draws an emotional response, try these ideas below to see if it cuts down on impulsive spending.
- Delay Purchases – The next time you feel like you should make a large purchase, try to delay your purchase. Sleeping on it often provides a lot of clarity, and you’ll likely lose that feeling of needing something new. For example, you could try waiting at least 24 hours for any purchase over $30.
- Avoid Favorite Stores – We all know stores are designed to make us buy more. Once you wake up to the fact that your favorite stores might be leading to unwise spending practices, it’s much easier to avoid them. Whether it’s an online store or a local shop where you know you can’t resist a good sale, steer clear. You don’t need that kind of temptation. For example, you could unsubscribe to emails featuring season markdowns and new releases. This way, you’re more likely to only visit a website when you’re after something in particular.
- Remember Past Mistakes – We all make spending mistakes. These don’t have to spell the end of the world but they should be something we learn from. The next time you’re preparing to buy something big, think about the last thing you regretted buying. Remember the emotions that you experienced, be strong and don’t let yourself fall victim to that impulse again.
These tricks will only work when you let them work. Really focus on making smart, focused purchases. Be intentional with your spending. You control your money, not the other way around.
5. Create Wise Credit Habits
You’ve likely heard that there’s such thing as good credit and bad credit. These can oftentimes get confusing, so let’s clear up these terms once and for all. What is good credit? Good credit is when you open new lines of credit responsibly, pay on time each month, and have a debt payoff plan for. Paying your entire credit card balance on time each month is an example of good credit practices. When you have good credit, it’s much easier to borrow more money at a lower interest rate.
As you can imagine, bad credit is the opposite. You have bad credit if you fail to pay your lines of credit on time or if you have a high credit utilisation. Bad credit scores don’t happen overnight, but they can feel hard to escape if you aren’t careful.
All credit ratings can be improved. You need to focus on paying back as much of your credit balance as possible and try not to make just the minimum payment. Avoid taking on any new lines of credit you don’t really need. Finally, be prompt with your payments to keep your credit account in good standing. The smarter you are with your credit, the better your financial future will be.
6. Prepare for Retirement
Finally, it’s time to take your retirement seriously. Unfortunately, over 45% of Australians pre-retirees reported not feeling like they could afford to adequately prepare for retirement. This is a startling statistic and it should be enough to kick your own planning into high gear.
While the Age Pension is a great tool for retirees, it shouldn’t be your only source of funds in your golden years. Your retirement is supposed to be a stress-free time and you don’t want to extend your working years or struggle to make ends meet.
The best thing you can do for your financial future is to start planning for your retirement today. It doesn’t matter if you’re worried you’re already falling behind your retirement savings goals or if you’re not sure what to do, just start with baby steps. First, you’ll need to focus on eliminating your debt. Retiring with outstanding debt is a recipe for disaster, so make this your first priority.
From here, set a savings target. Decide how much you’ll need in savings to continue your standard of living. Working with a financial planner is the best way to ensure you’re on the path to retirement success, so don’t be afraid to reach out to a money expert for help budgeting for your golden years.
Work Towards Your Financial Future in 2019
You can make 2019 the year of good money habits. No matter what your savings or credit has looked like in the past, all of that will be behind you when you turn over a new leaf. With this change of season, it’s time to welcome smart money habits, more savings, and a debt payoff plan that works for you.
Do you need help planning for your financial future? The experts at Debt Busters have over a decade of experience helping Australians navigate their own debt payoff strategies and more. Contact our specialists today on 1300 368 322 to build a brighter financial future one step at a time.