Looking After Your Money
The beginning of a fresh new year is always a good time to start planning for the months ahead and start tackling some tasks.
Here are some tips on how to look after your money in 2019. 😊
Keep a money diary
This is great idea for anyone who wants to save more or cut expenses but doesn’t know where to start. According to Suter, money diaries have become very popular with many people publishing them on online. While you don’t have to publicise your personal finances with the world, keeping track of incoming money and outgoings in a diary could help throw the light on wasted money or areas for concern.
You can also use a budget planner calculator to start organising your finances.
Tackling tasks like switching bank accounts, checking your super or going onto a cheaper energy contract are easy to put off. So, instead of picturing them as one large, boring task to be tackled, try taking them one month at a time. Write a list for the year of all the things you have been putting off and tick one off each month.
Manage debt effectively
Finance guru Laura Higgins says there’s no better time to check your finances than the start of a new year.
ABC Radio listener Oscar called to share his story; he owes $6,000 to the tax office and $15,000 on a car loan.
He wanted to know whether he should get a lower interest personal loan to pay off those debts before selling his car.
While Ms Higgins didn’t want to provide specific financial advice without knowing all his circumstances, she did have some suggestions.
“You’re asking the right question,” she told Oscar.
“So just looking at the debt that you’re managing and really tallying it up and being honest about what you owe and what you can service is a really great thing to do.
“Sometimes people are even afraid to do that, so it’s a great first step.”
Ms Higgins said it was common for people, especially young people, to take on large amounts of debt for a car.
But just because it’s common, doesn’t mean it’s a good decision for you.
She said it was important to think about not only whether the loan was serviceable now, but whether it would be serviceable if your circumstances changed.
“Your bank may be able to provide you some advice on whether or not the arrangements that you have are best suited to you.”
Ms Higgins also suggested approaching the ATO if the repayment plan was causing financial hardship.
“They can help you out with how you repay that amount so that’s something to explore.”
What to do with your savings
John and his wife had their first child a few months ago and managed to save a small amount of money.
He wanted to know whether he should invest it in shares or put it in a savings account.
Ms Higgins recommended people consider their appetite for risk and when they wanted the money to come back to them.
“You need to look at the bigger picture of what you’ve got on your plate and what expenses you have, not just today but what might be coming up in the future,” she said.
“Investing a little bit in something that’s low risk, that might be the right thing to do. You’ll need to educate yourself a bit more in that space.”
She also said paying off more of your mortgage, investing in superannuation or creating a savings buffer might be right for you.
“I think it’s probably even more important when you have a little one that you do have a little savings buffer that you can access if something unexpected comes up.
“You do need to ask yourself those questions, so what do you need for now, what do you need in the short term, and what do you need for the long term.
“Spreading a little bit, and the right amount, across those buckets is sometimes the right thing for people to do.”
Do you have any money tips? Share them with us! 🙂