New year, new start—it’s time to sort out your finances
If you’re like three out of four Australians, you may be starting the year without a proper budget1.
AMP research indicates that over a third of us believe budgeting is too much effort and almost one in five Aussies say budgeting takes too much time2.
And even if we do start off the year with good intentions—sitting down and creating an initial budget—one in four of us won’t end up keeping to it3.
After all, what’s the point? New Year’s resolutions are a bit of fun but no-one sticks to them, right? It doesn’t matter whether it’s fitness or finances, a few weeks later and you’re back to square one.
So why not do things a little differently this year. Instead of making ambitious life-changing resolutions that a Trappist monk would have difficulty sticking to, why not take it step by step.
Here are some easy wins to get you on the right track for the New Year.
Work out your goals
It sounds almost too simple. But if you don’t know what you’re trying to achieve, you’ll never get anywhere. And different goals need different strategies…saving for a new car is very different from building up your retirement income.
Take a few minutes to write down your goals for 2019 and beyond.
- If your goal is to pay for this year’s big trip, you’ll need to start making some savings to free up some cash.
- If your goal is to finance your upcoming wedding, you’ll need to think about putting some money away in a fairly low-risk investment option.
- If your goal is to buy a house, you’ll need to work out where you can afford to live and how you’re going to build up a deposit.
- And if your goal is to put your kids through school, you’ll need to start thinking about a long-term investment plan.
Try our goals explorer tool to help work out what goals are important to you.
You might be the kind of person who enjoys paperwork. But for many of us the age of electronic commerce has been a game changer. Unless you want to, there’s no reason to be receiving any bills or statements by snail mail.
You don’t have to sort it all out today. Just make a point of every time a bill comes in, follow the simple instructions to go paperless—most suppliers offer an electronic option these days. In a few months the postie will only be stopping at your door with the exciting stuff from Amazon.
Start a budget
We’re all different. Some of us work best off a screen, some of us prefer old fashioned pen and paper.
If an Excel spreadsheet sounds too hard, accounts like the AMP Bett3r Bank Account can take the hard work out of paying, saving and spending with three linked accounts that do the hard yards for you. Or AMP’s Money Manager tool gives you an easy way to manage your cash flow.
Shop around for better deals
You wouldn’t willingly pay more for an item of clothing when the store down the road is selling it for less. So when it comes to your home loan, your utility bills or your credit card why shouldn’t the same rule apply?
If you’re not happy with your bank, your utility provider or your credit card company, you can make a change.
Talk to your provider about whether you’re getting the best deal for your particular circumstances. And if not, be prepared to take your business elsewhere.
Sort out your super
Earlier in your working life, it’s easy to ignore super as money you can’t access for a very long time. Out of sight, out of mind. But gradually you’ll come to realise that your retirement nest egg is probably your biggest investment outside the family home.
Fortunately, these days most super providers are making it much easier to get your super in order. You can probably tick most of this list off in a few hours, with many super funds offering online options.
- Check you’re being paid the right amount by your employer.
- Consider bringing your super together into one account so that you’re not paying more than one set of fees and charges.
- Update your beneficiaries so the right people get your money if anything happens to you.
- Make sure your money is invested in the right assets for your stage of life and appetite for risk.
Make a will
It doesn’t matter what stage of life you’re at, you don’t want complications for your loved ones in the event anything happens to you. If your needs are fairly simple, you might want to consider setting up a will online. If your needs are a bit more complicated, a financial adviser, a solicitor or a public trustee can help.
And remember, a will is a living, breathing document. If you experience major life changes like embarking on a new relationship, starting a family or splitting up with your partner, you need to make sure that your will is up-to-date.
Get your tax sorted
If you’re the kind of person who’s already got their receipts filed in date and alphabetical order, you can skip this bit.
But if you’re like many of us, you tend to approach tax time with trepidation. Your receipts are all over the place, you’ve forgotten the work HR password to retrieve your payslip and you still haven’t got around to looking into the Medicare levy surcharge.
It’s time to get back to basics. Don’t worry about how disorganised you’ve been in the past, focus instead on getting your affairs in order for the future.
- Create a simple spreadsheet for your tax receipts to make your next tax return much easier.
- Go electronic with your statements and file them on the home PC.
- Register for the ATO’s e-tax return or get in touch with a local accountant.
- Check out what you can and can’t claim—the ATO’s website has some really useful information.
You’ll be surprised at what difference a few really basic steps can make to your personal finances. A phone call here, an online form there…and before you know it, you’ll be well on the way to getting your money stuff together in 2019 and beyond.
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