NEW FINANCIAL YEAR + NEW GOALS = NEW BUDGET
Published on July 19, 2016 3:35 pm, by Jen Bakker
Right now is the perfect time to sit down and revisit your financial goals. It makes sense to review our money goals in January (harness that New Year’s resolution) and July when the old financial year ends and the new one starts. Money is on our minds making it easier to focus and assess. Ask yourself the following as a place to start:
- Do you have less debt than twelve months ago and/or more savings?
- Did you meet any financial milestones during the financial year?
- Did you spend less than you earned?
- What is your personal rate of inflation? As a percentage how much more or less did you spend in the last 12 months compared to the 12 months before? Can you set a target for the next 12 months? Getting ahead is harder if you spend at the same or a higher percentage to the rate your income is rising.
- What could you have done better?
Finances are such an individual thing but there are a few key steps it’s worth taking for everyone. Know where your money is going and how to get it to work the hardest it can for you. Set yourself up to spend less than you earn. Identify your goals – short term, medium term and long term. We’ve put together 10 tips to help you on your way.
- Work out what you want. What do you want to achieve this financial year? What does that translate to in an actual dollar amount? Do you want to save for an event or a purchase? Do you want to repay debt? How much do you need?
- Check your banking structure is in line with your goals. It’s great to have an account for spending, an account for bills and emergencies, and an additional account for savings. Check comparison sites to find accounts with minimal fees and the best rates.
- Review credit Cards & Store Cards. Look at your credit cards, the annual fees and interest rates and compare to what is available in the market. If you have high balances, consider a balance transfer and work towards one card. Rewards points aren’t a good reason for additional cards, for lots of people the extra they spend having the card exceeds the value of the rewards.
- Set up a bills calendar. Know when your bills are due. Convert your bills to your pay period and understand how much you need to put aside to keep on top of these. Set up alerts so you are never late in paying them.
- Repay bad debt. Repay bad debt before you start to save towards your goal. Work out how much you would pay in interest on your debts and then how much you would receive in interest in savings (some of which you lose in tax). It’s really not worth holding bad debt while saving.
- Build an emergency fund. This fund is for life. Often what gets in the way of our savings is real life. It’s the unexpected; the really expensive car service, the root canal, or the braces for child number 2. We suggest 3 months’ worth of salary in an emergency fund.
- Automate your savings. Set up an automatic payment to come out of your transactional account on pay day. Put it in to an account that doesn’t have an ATM card attached. Make it hard to access. If you’re disciplined and you have an offset account you will get a better return for your money here.
- Make new habits. Work out where you are leaking money. Do you spend too much on lunches and coffees during your working day? Do you have too many drinks on a Friday night after work? Should you be eating in more during the week and pocketing the difference between groceries and fine dining? If you’re eating out can you go BYO instead of fully licensed? Commit to small changes that will lead to big savings.
- Spend less than you earn. Once you know what you need to repay debts, meet your savings commitments and bills, budget with the rest. Understand what you can spend and still meet your goals. MoneyBrilliant spending reports are available for customising and checking at any time to keep you on track.
- Commit to checking in. Sitting down again in July 2017 to reassess is crazy. Put a regular reminder in your calendar to check in. Weekly, fortnightly or monthly, perhaps in line with your pay period. This is where you can celebrate your achievements and make adjustments for any slip ups.
HOW MONEYBRILLIANT CAN HELP YOU
At MoneyBrilliant we believe that people live better lives when they make better decisions about their money. We use technology to make it simpler and more convenient so you will have more money to do the things you want to do and more time to enjoy living.
MoneyBrilliant is a personal finance app that automates your finances for you. Once you link your accounts your transactions will be automatically categorised and presented to you in the form of spending reports. This gives you a full picture of your money and spending. It helps you identify where you are spending more than you think.
Once you know where your money is going, MoneyBrilliant has a variety of features to help you spend less than you earn. There is Safe Spending on mobile as well as the budgeting tool on desktop. The budget automatically shows how much you’ve spent per month on average over the last 3-12 months, giving you a figure that you can amend for spending going forward.
When you are tracking well, Safe Spending is in the green, showing you are spending within your means for the current period, where it is amber or red, you need to slow down!! Overall MoneyBrilliant budgets and tracks your spending for you with very little manual input from you.
Related Articles –
Creating new and better money habits
The cost of having kids
Beating the urge to spend