This is how you plan for a good year ahead
IS GETTING your finances under control right from today one of your top new year resolutions ?
You're not alone. Ask around your neighbour or village friends and you will find an awful lot of them want to have less debt and more certainty in what money they have to spend on their cost of living every day, week and month.
The best place to start is to put together a financial plan, or if you already have one, drag it out of the bottom draw and get to work on updating the numbers to fit your current situation.
ASIC's Money Smart website also offers some top tips for getting your money working better for you in 2018.
1. Make a plan for your money
Having a plan in place to manage your money will help you track your spending and understand your money habits. A budget is the cornerstone of a financial plan. Use ASIC's MoneySmart interactive budget planner to help you work out where your money is going and where you might be able to save. ASIC's MoneySmart TrackMySPENDapp can help to manage your personal expenses on the go.
2. Take charge of your debt
Get your finances on track in 2018 by taking control of your debts, including any credit cards which may have been over-used during the festive season. You can start by making extra repayments on your smallest debt and when you have paid it off move onto any other debts.
A credit card debt of $2000 could take you over 12 years to pay off and cost about $2150 in interest, if you only pay the minimum repayment. If you are one of the 36 per cent of Australians who said they used their credit card for Christmas spending, use our credit card calculator to see how much time and money you can save by making higher repayments.
3. Create a savings balance
Having a healthy savings balance gives you breathing space to deal with life's ups and downs, and means you won't have to borrow money if something unexpected happens. If you're looking to save for something specific in 2018, such as a holiday, a home or a wedding, having a savings plan in place is critical to achieving your money goals. Use ASIC's MoneySmart savings goal calculator to work out how long it will take to reach your savings goals.
A good tip for building up a savings buffer is to 'set and forget', by opening a separate savings account and making regular payments automatically via your bank or from your pay.
4. Take stock of your insurance
Having the right insurance in place is a critical part of a financial plan, but it pays to shop around. It's important to review your existing policies to ensure they cover everything you want included and if they don't you can find a policy that does. Make a resolution to compare the policies offered by other insurers when your home or car insurance comes up for renewal to ensure you get the best deal.
5. Maximise your super
Get to know your super and know what is your superannuation balance. You can do this by going to your super website or reviewing your super statement.
If your super is spread across multiple funds you should consider combining multiple accounts to save fees. Making extra contributions and reviewing your investment options can make a big difference to your retirement funds. Use ASIC's MoneySmart retirement planner to find out if your super savings are on track.
ASIC's MoneySmart New Year's resolutions are available at: www.moneysmart.gov.au/tools-and-resources/news/new-years-resolutions