5 Easy Financial New Year Resolutions
So much easier than quitting smoking, going on a diet or starting a new fitness regime, these quick and easy financial changes can help set you up for an amazing 2018!
1. Set up an automated savings transaction
Whether it be $20, $50 or $100 per week, putting a small amount of your income away will give you a lovely surprise at the end of the year. Just think, of the savings after 12 months;
$20 per week = $1,040
$50 per week = $2,600
$100 per week = $5,200
Here’s the resolution – you can’t touch the money until this time next year.
How to
Most banks allow additional sub accounts under your transactional account, so jump onto your internet banking or call your bank, add that extra account, and set up an automatic transfer of funds. Call the account, ‘Don’t touch until 1 January 2019’.
2. Find additional income sources
Think about what you can do to earn extra cash. Firstly, work out how much time you have available to this additional income source. If you work full time, you will need to consider something you can do in the evenings or weekends. Secondly, what are you good at? If you can knit, write, or do physical work, there is money to be made. Here are some ideas;
Just think of where the savings can take you...
3. Cancel additional credit cards
Yep, cancel them. If you’ve got more than one credit card, cancel it. Nobody really needs more than one credit card, and they certainly don’t need more than a $5,000 limit.
It’s a slippery slope going from one, to two, to three credit cards. Remember, it’s not pretend money, you have to pay it back. So, remove the temptation of spending big, and close those additional cards.
Make sure you pay off your one and only credit card bill each month and reduce the credit limit to a manageable level.
If you’ve got money owing on them, see point 4.
4. Pay off your credit cards
This should be your highest priority in terms of your cashflow. Credit card purchases have incredibly high interest rates and are even worse if you’ve used a cash advance feature.
When possible, make additional payments and bring the balance down as quickly as possible, don’t just pay the minimum amount. Having credit card debt hanging over your head is a recipe for disaster.
If you owe $10,000 on your credit card and pay 20% interest p/a, that’s $2,000 a year in interest, plus fees! You may choose to transfer the owed amount to a 0% balance transfer card, to avoid accumulating more interest costs, but remember most will charge a fee of around 2% for the privilege.
Once you’ve done this, see point 3.
5. Refinance your home loan
Safe to say the biggest financial burden is your home loan, and even just a 1% reduction on the interest rate can save you thousands.
Refinancing is a great option if you secured your home loan when interest rates were higher than they are now. Refinancing may enable you to access the equity in the property so you can make improvements, extensions or use as a deposit for another property purchase.
Mint Equity takes the headache out of refinancing by assessing the best products to fit your lifestyle and strategy.