New year, new financial resolutions

The dawn of a new year is the perfect time to hit reset and correct course when it comes to your money. 

You may have already given thought to some health-related wellness goals for 2018, but what about your financial wellness?

AMP research has revealed that a quarter of Australian workers have difficulty in making ends meet, with the most common triggers for financial stress found to be bad debt, the need to save for retirement and the need to provide for family1.

So perhaps it’s time to take a look at those areas and figure out what’s working, what’s not, and what you can do to correct course in the new year.

Start sorting out your debts

If debts are a concern, firstly sort the good debts from the bad. Good debts are those which are helping you build long-term wealth, such as your home loan.

Take stock of your bad debts, such as credit card debt, personal loans, or car loans, looking at the amount you owe, the rate of interest, and any fees, you’re being charged on each.

It’s worth contacting your debt provider to see if you can re-negotiate the repayments or interest rate, and then prioritise your debts, trying to clear those which are costing you the most in interest and fees first.

You could also look to consolidate your debts into one loan, which can give you a clearer picture of what you owe and potentially save you money too. If you already have a mortgage, you can put this loan at the centre of your finances by consolidating all your debt and savings into it.

This can help your overall financial position by minimising the total interest you pay, because most credit card and personal loans are charged at a higher interest rate than a home loan. While using your savings to offset your home loan will also result in reducing the amount of interest you pay.

Get a budget in place to help with providing for your family

For some of us, it’s not the future but the day to day and here and now that keeps us awake at night. If you’re sick of living week to week or often find you have more month left at the end of your money, 2018 could be the year to take control of your finances.

Start by making sure you have a budget in place, so that you have visibility over the money you have coming in and what’s going out. Our how to budget page can be a useful starting point in creating a budget.

It can also be helpful to think of your money in terms of buckets, to separate money to pay the bills out from the money you have for everyday expenses, such as food and entertainment. But if the thought of monitoring and managing multiple buckets of money brings on a headache, AMP’s award winning Bett3r account could be the solution you’ve been seeking.

Bett3r features three linked accounts – pay, save and spend - which work seamlessly as one, transferring your money automatically once your preferences have been set up.

Think about your retirement savings

If it’s saving for your retirement that’s worrying you, there are things you can do to get your retirement plans on track, and you don’t require a large amount of money to get started.

Firstly, there are billions of dollars in lost super. Some of it could be yours, so it might be a good idea to do a lost super search to help you claim retirement funds you may have forgotten about.

Similarly, many Australians have multiple super funds, which may mean you’re paying more in fees than you need to. To avoid this, you can consolidate your super into one fund.

You can also review your super fund to ensure you’ve got your super invested in the right investment option for your age, stage in life and individual circumstances.

Another way to grow your super balance might be to put more money into super. There are different ways to make contributions, and the contributions don’t have to be large to start adding up.

Set yourself financial goals

Around 80% of Australian workers have financial goals, but only 18% have a defined plan to achieve them.2 So the new year can be a great time to consider your bigger financial goals and try to put some plans in place to start or continue working towards them.

Whether it’s buying a home, upgrading your car, taking a holiday or doing some renovations, you can explore your goals online using our tool.

Start now

The new year is upon us so now’s the time to act. For help in putting your plans in place, you can speak to your financial adviser or find an adviser near you.

Good luck and happy new year!

 

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Any advice in this page is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters. AMP Bett3r Account is issued by AMP Bank Limited ABN 15 081 596 009, AFSL 234517. Consider the terms and conditions available on request by calling 13 30 30 or at amp.com.au/bett3r and whether this product is appropriate for you. Fees and charges apply.

Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any decision. Except where liability cannot be excluded, AMP does not accept any liability for any resulting loss or damage.