Ah, the start of a new year. An opportunity for a fresh start, the turning of leaves, a brand new ‘you’ and so on and so forth (I think you get the idea.) But – did you know that the most popular new year’s resolutions are to eat healthier, exercise more and yep, you guessed it, save more money. At Talem Wealth, we say the occasional glazed doughnut isn’t going to hurt and if you do skip leg day next week, it’s not the end of the world. However, we are all in favour of saving more money. That’s a resolution that can have some seriously positive outcomes.
When it comes to resolutions, it’s all about goal setting. So we challenge you to make this the actual year where you set your financial goals and you actually stick to them. Firstly, ask yourself what is that you want to achieve? Depending on where you’re at in your life it could be as simple as purchasing a car or paying off your student loan right through to purchasing your second property or investing in the next growth startup. Once you know what you’re aiming for, it’s a lot easier to stick to a plan.
We’ve put together four financial resolutions that you can implement straight away to reach your goals faster:
Financial resolution 1 – Set up new saving habits
Hopefully, you didn’t splurge too much over Christmas and the holiday break. If you were following our advice, then you should be starting in a pretty strong position. Is 2019 the year to consider a new approach to saving? According to a study on habits, it takes, on average, 66 days for a new behaviour to become automatic. So consider getting on top of your savings habits sooner rather than later.
First things first, dust off your Excel application and open a new spreadsheet. In order to get your head around your savings plan, you need put together a detailed list of your income, daily and monthly expenses and any debt that you’re paying off (you may want to download our budget template here). Now you can identify the wants from the needs and start to prioritise your spending. For example, do you really need the latest Nespresso machine? Is that holiday in May really worth it, or can you go later in the year? If you set aside money for the absolute essentials, you might be pleasantly surprised with how much cash you have left over. Now you can work out how much you can put away regularly.
It’s worth shopping around for high-performing saving accounts. Many banks reward customers that plan to not touch their savings over a period of time, which can help manage the temptation of dipping into your account. A financial adviser can show you ways in which you can be accelerating your savings. It’s about being strict and sticking to your goals.
Financial resolution 2 – Start to dominate your debt
You are the master of your money and the sensei of your spending. If you have debt, make 2019 the year to get on top of it or, better, get rid of it. Did you know that over 70% of Australians own a credit card, with the average balance sitting at over $3,000? These can often be the hardest to tackle, given the high interest rates, which can end up costing you thousands of dollars as try and pay back the debt. Think of the analogy ‘one step forward, two steps back’.
Don’t fall in the credit card trap – consider taking advantage of a balance transfer. As a marketing ploy, banks offer anywhere between six to 24 months of an interest-free period to hook in customers. If you’re disciplined, you can use the period to get the debt down as quickly as possible. Not only are you more clear on your minimum monthly repayments, but you’re also avoiding interest payments, leaving you with more cash in your pocket. The trick is to discard the credit card as soon as it is sent to you as any additional purchases will attract interest straight away. (Have your scissors at the ready!)
Financial resolution 3 – Improve your investment knowledge
There are few truer sayings than ‘knowledge is power’. Investing might be a mysterious word for many, it doesn’t have to be for you. Armed with a bit of knowledge you may find that a once daunting concept is more accessible than you originally thought. Investing could be as simple as increasing what you are contributing to savings or even establishing a Raiz account to put those extra dollars and cents to work. Alternatively, you might like to outsource some of this. A financial adviser can point you in the right direction and help you get started. Plus, improving your knowledge and financial understanding will strengthen your relationship with your adviser and yield better results.
Financial resolution 4 – Be accountable
At the risk of sounding bleak, 80% of new year resolutions fail by February. So if you want to see results, we’re asking you to commit. Like really commit. You’ll need to make sacrifices but, in the long run, it’s going to serve you better financially.
If you’re prone to whipping out the credit card, take it out of your wallet and carry cash. Set a daily budget to help make you think harder about your everyday purchase decisions. If you’re a sucker for online shopping, consider suspending your PayPal and AfterPay accounts. Be proactive and take the steps to be accountable.
If you’re in a financial rut or unsure what your next move might be, then it’s perfectly okay to ask for help. Speaking to a financial adviser could even be life-changing. Think of them like a financially-focused personal trainer. They can help set out your goals, show you how to stick to them and monitor your performance so you can achieve results.
We are ready to take on 2019 with you
If you’re serious about setting financial resolutions, then speak with us today.
At Talem Wealth we help our clients achieve their goals and achieve financial freedom. We do this by working closely with them, tailoring our advice and developing personalised roadmaps to help foster a healthy relationship with money. We have the expertise and resources to help with all areas of financial planning, no matter your goal. Our aim is to empower you to lead your ideal lifestyle