After an expensive holiday period, we often want to get off to a good start with our finances, but it is hard to know where to start.
Small changes to your everyday finances, such as reducing the limit on your credit card, setting up dedicated bank accounts for different expenses and cancelling unused subscriptions can all go a long way in getting you off on the right foot.
Here are five money-saving New Year’s Resolutions I recommend making in 2019:
For some of us, the danger of having a $10,000 limit on our credit card means that we automatically count that $10,000 as part of our everyday spending money. Take control by reducing the limit on your card to an amount you can pay off confidently every month.
If you have racked up credit over the holidays it’s a good idea to either reduce the limit on your card or take up on of the balance transfers that are on the market. That’s where you transfer your balance and it’ll be a zero-percentage rate for a number of months, meaning you can pay it down without the interest going up all the time.
This can also be really helpful for people who may have a set income, for example those on the Age Pension. Compare the Market have a calculator on our website which can tell you how much interest you could save.
If you are able to easily access your savings, it can be difficult to have the willpower not to touch it. Work out what you need to do to protect your finances so you aren’t constantly drawing down on your savings with your card or through internet banking.
I’d go as far as suggesting having a bank account at a different bank so you don’t have the ability to transfer across funds online. So let’s say you bank with NAB, open up another account with Commonwealth that you can’t access with a card and use that to put away $50 a fortnight or say $20 of your fortnightly pension. That way, when you get to next year, you will have some money set aside – perhaps to spend on next Christmas.
If you are struggling to pay bills at the end of each month, or not meeting your savings goals, you can reduce your spending by cancelling memberships you are not using (such as the gym, local clubs etc), finding better deals across your bills or switching loans to lower interest rates.
It’s really important when your income isn’t as high to make sure you are getting the best possible deals on the market. Any time that anything comes in, whether it’s an energy bill or an insurance quote, compare these online to make sure that all discounts are being applied and that you are getting the right deal for your circumstances.
Figure out what you will need to spend or save for over the year and set up low-fee accounts, for example one for your bills, then savings, a splurge account for holidays and having fun, and finally an everyday account.
Another good thing to do, especially for those who have a fixed or low income, is to set up a transfer with your bank so the day your pension goes in there might be $25 which then goes automatically into the account you have set up for your bills.
As it is the start of a new year so it’s also wise to note how much your bills are as they come through and then work out what they will cost you for the whole year. Let’s say you have $2000 worth of bills over the course of the year, so you know you will need to put away $80 a fortnight to cover the cost.
While that might eat into your pension, you will know that the money is there – then whatever’s left is available for you to use as you need and want to.
I’d certainly suggest staying away from accounts that have high transactional rates on them – they are the accounts that give you a certain limit for transactions then after that you begin to get charged.
Also planning when and where you use ATMs is really important. So, at the moment in Australia it is free to use any ATMS attached to a bank. But let’s say you go out for Christmas and go to a pub or a restaurant and use their ATM, these ATMs will always have a charge for you to carry out a transaction at that machine.
Planning and making sure your accounts are okay is always a good idea, but also making sure you’re making the right transactions is definitely really important.
Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.