3 tips to kickstart your financial goals in 2021
The start of a new year is the perfect time to set some goals for the year ahead and check the health of your finances. It’s a good time because you have the whole year to meet your savings goals and get any debt under control. To help you put your finances on the right track for 2021, here are three simple tips.
1. Review your finances with a budget
Getting a clear picture of your current financial position will help you identify what’s working and what isn’t. One of the best ways to review and assess your finances is to create a budget. You’ll not only get to see where all your money is going, but also how much debt you have to pay off, and what’s left to put towards savings or debt repayment.
The good news is, there are plenty of online tools and spreadsheets to help you prepare your personal budget. The best place to start is by identifying all of your expenses, debts and income sources. Check your bank and credit card statements to look for regular bills like rent, insurances and utilities, and add them to your budget. For expenses that are likely to fluctuate, like groceries and entertainment, average them out over a few months.
Once you’ve entered all your expenses, see how much is left over from your salary for savings or to pay off debt. Apart from seeing where all your money is going and how much money you could be saving, you can see what expenses could be reduced. Look at whether your third or fourth fave streaming service you haven’t used in a while is worth keeping. Cooking your own meals, instead of ordering food deliveries could also save you big time.
2. Have regular “money dates”
A simple way to stay on top of your finances is to regularly check in on your budget and financial goals with “money dates”. Whether it’s weekly or monthly, spending time reviewing your budget will help you see any areas requiring improvement. Checking how your savings or debt repayment plans are going is definitely worth a night in or weekend day at home – particularly if you’re saving for something big like a car, holiday or a wedding.
While you’re looking “romantically” at your budget figures on a money date, it’s also worth checking your credit score via one of the many free online services. With Comprehensive Credit Reporting (CCR) practices being used by all banks and other lenders, your borrowing power or credit score is no longer set in stone like it used to be. Now, your credit score can fluctuate depending on whether you’re paying your bills on time.
It may not sound very glamorous, but showing a little more love towards your finances can make a huge difference in reaching your goals. Even just checking your bank balances each week via your mobile banking app can help you monitor what’s going in and out of your accounts. Doing this can even protect you from being the victim of online theft.
3. Make the most of your savings
If you find you have some money left over each pay, set up automatic debits that go into your savings account. Another quick way to get your savings moving in the right direction is to use a savings top up feature – where you save as you spend. It’s as easy as choosing an amount that’s added to your savings each time you make a purchase from your transaction account. Another easy way to save is to try the 52-week money savings challenge. It’s as simple as setting aside a certain amount of money per week. For example, in the first week you start the challenge you save $1. In the second week, deposit $2. By Week 52, you’ll be depositing $52 and should have saved over $1,300 in total.
If your savings plan is going according to plan, you could also look at getting your money to work harder for you with an interest earning savings account or term deposit. Earning interest on your savings keeps them growing without doing much at all. Some savings accounts offer bonus interest when you have a linked transaction account.
So what are you waiting for? Getting your finances in order and aligned with your goals can be as simple as following our tips and starting now, rather than just putting it off.