When the New Year rolls around many of us make resolutions about our finances.
Whether it’s aiming to save a certain amount of money, pay off a debt or make a big purchase, setting financial goals for the year is a great way to get some control of your finances.
But how do you get to achieving your goals and take control of your finances?
ASIC has come up with a list of six steps you can take to help you reach your New Year’s financial resolutions.
1. Have a look at your finances
According to ASIC, it’s important to take a look at your financial goals over the short, medium and long term and put a plan in place to achieve them.
“A budget is the cornerstone of a financial plan,” ASIC’s MoneySmart Senior Executive Leader Miles Larbey said.
“As part of reviewing your finances, you might want to check your credit history. As lenders will review your credit report when you apply for credit or a loan it is important to check your credit history details are correct.’
“You are entitled to obtain one free copy of your credit history each year from a credit reporting agency.”
2. Get your debt under control
If you used your credit card over Christmas or you’ve fallen behind in payments, now is the time to take back control of your debts.
According to ASIC, one in five visitors to their MoneySmart website admitted to using their credit card over the Christmas period.
“‘A credit card debt of $2,000 could take you over 12 years to pay off and cost about $2,150 in interest, if you only pay the minimum repayment,” Larbey said.
He suggests using online tools such as ASIC’s credit card calculator to work out your repayments.
3. Set up a separate savings account
You never know when something unexpected could happen, whether it’s illness or injury or even emergency repairs to a car or home.
That’s why it’s a good idea to set up a separate savings account to cater for life’s little emergencies.
‘Having a savings buffer or emergency fund gives you breathing space to deal with life’s ups and downs, and means you won’t have to borrow money if something unexpected happens,” Larbey said.
“A good tip for building up a savings buffer is to “set and forget”, by opening a separate savings account and making regular payments automatically via your bank or from your pay.”
4. Take a look at your superannuation
Whether you’re planning on retiring or you’re already retired and using some of your superannuation, knowing your superannuation balance is very important.
Larbey advises to visit your superannuation provider’s website or review your superannuation statement.
‘Get to know your super and join the three quarters of Australians who know exactly or roughly their superannuation balance,” he said.
“Combining multiple super accounts to save fees, making extra contributions and reviewing your investment options can make a big difference to your retirement funds.”
5. Get financial advice if you’re stuck
If you’re stuck reaching your financial goals, there’s many ways you can get the advice you need, from seeing a financial planner to getting financial advice from websites such as ASIC’s MoneySmart site.
Larbey said ASIC’S MoneySmart site had a financial advice toolkit that could come in handy if you’re planning on getting financial advice.
“It will help you navigate the financial advice process step by step, choose a financial adviser and know the questions to ask,” he said.