The new year is upon us, and with that comes the inevitable New Years’ resolution list. According to Inc.com, saving money was one of the top five New Year’s resolutions for 2017 and we expect it will be a habit that many people will look to make again this year.
There’s no shortage of advice when it comes to habits but generally the simpler the better. So, read on for some simple yet effective money habits you can pick up in the new year to set you up for a happy, healthy and debt free 2018.
Create an emergency fund
Not only will this give you a soft landing pad should things go south but having an emergency fund will give you peace of mind. Aim to save at least three to six months’ worth of your salary in case of job loss, unexpected medical costs, house repairs or anything else life might throw your way. You won’t regret this one, and it’ll save you big someday.
Now is a great time to find a few tricks that get you in the habit of slowing down and thinking about your purchases. For example, anytime you’re undecided on a particular item, such as which pair of shoes to purchase, use it as a sign not to buy anything. Other hacks include putting your wants onto a 30 day list, avoiding stores you know will tempt you or shopping with cash only and leaving your cards at home.
Make your super, super
You can’t miss money you’ve never had, so start transferring extra money from your paycheck as soon as you get paid. You should receive 9.5% of your gross income as a guaranteed super contribution from your employer, however, contributing 0.5, 1.0 or even 1.5% can have a huge impact on your future savings. If you can fit this into your budget, it’s money well spent, and your future self will thank you big time.
Fall in love with cooking
Cooking at home is better for both your wallet and your health, so this one is truly a win/win. If you can view it as a pleasure rather than a chore, you’ll save big when it comes to your monthly budget. You could easily save over $1,000 a year with a home cooked lunch.
Put your monthly payments on cruise control
Set up automatic payments for all of your monthly bills to make bill paying a breeze. We still recommend checking that your payments have processed on time, but you’ll spend much less time doing this than you would paying your bills manually every month. If possible, it’s a good idea to do the same thing with your savings account, making automatic transfers to your sub-savings accounts for things like holidays, education and your emergency fund.
Use bonuses to pay down debts
This is definitely not as fun as spending your bonus money on a splurge item or a holiday, but it does mean you’ll have more money in the future to cover your expenses and to save up for that special treat. Make sure that your tax refund, bonus or any other windfalls go towards paying down your debts this year.
Review your spending
Are you spending money on things that align with your personal values and goals? Question how you’re spending your money right now and start to prioritise what’s truly important to you. For example, if you value spending time with friends and family, then instead of spending your money on clothes and accessories, prioritise spending your money on family dinners, vacations and experiences like watching movies with loved ones.
Focus on paying down your debts
Ideally the only debt you should have is good debt like a home loan. Focus on paying down your debts this year, and consider seeking professional help if you’re not sure how to tackle it. The peace of mind alone will make this year better than ever!
Compare the essentials
Take a look around to see if you’re getting the best deal on your mortgage and insurance. Pricing schemes often change and this is a great way to save on a service you’re already paying for. If you can get a better deal elsewhere, check to see if your current company is willing to price match, and if not, simply switch and watch the savings roll in.
Back to basics
By focusing on the basics like spending less, saving more and paying down your debt, you’re sure to have a happier financial outlook this year and for many years to come.
If you’re ready to tackle your financial health this year and need an expert on your side, get in touch with us on 1300 368 322. We’ve been helping Australians get back to basics for over 15 years and we can help you too.