When a New Year begins it’s easy to block out the memories from the one just gone – like the time you maxed out your credit card on Boxing Day! But a New Year calls for new resolutions, and what better way to kick start 2016 than by adopting thriftier money habits? We’ve come up with five simple hacks to help you get through the next 12 months with more cash in your piggy bank!
Hack #1 Build a “me” budget
Willy-nilly spending was so 2015. This year you’re going to be in control of those cards in your wallet and where your salary goes. That’s why a “me” budget tailored to you will be important to help you reach your money goals this year.
The best way to create a budget is to sit down, print off your bank statements, grab a few different coloured highlighters and identify the essential expenses and the habits that are costing you big. Because if those half price Groupon massage deals you routinely buy aren’t adding to your quality of life, those dollars will be better spent on something else!
There are plenty of online planners that will help you sketch out your 2016 budget, like Mozo’s nifty budget calculator. But if the old-school Excel spreadsheet method works for you, then go for it! The trick is to have realistic targets, so you’re giving yourself money to play with, but not spending more than you earn.
Hack #2 Battle credit card debt
Don’t delay in trimming off any credit card debt you racked up over the silly season. Map out a repayment plan in your budget or think about a 0% balance transfer card that will help you put the bulk of your repayments towards paying off your debt, not interest.
For instance, say you have the average credit card balance in Australia of $4,300 and can afford to make a monthly repayment of $500. With the average credit card rate in Mozo’s database of 17.41%, our credit card debt payments calculator shows you’ll be charged $327 in interest and it will take 10 months to repay! But if you moved the balance over to a 0% BT deal, you’d pay no interest and wipe that debt off one month earlier.
For more tips on using a balance transfer card like a pro, read our spiel on how to recover from post holiday debt.
Hack #3 Ditch the label
What if you could save yourself hundreds of dollars in 2016 by ditching brand loyalty? Okay, so we’re not saying give up your go-to G-Star branded jeans, (even though Roy Morgan research found women who buy for labels spend $200 more than women who don’t care!) but what about ditching labels during your weekly trips to the supermarket? So rather than spending $4 on a branded plain flour, you’d go for the generic ‘home brand’ version at $1.50. If you keep this in mind each time you shop and jot down the no name products you like, you’ll arrive at a perfect budget friendly grocery list in no time.
Hack #4 Be future orientated
Start a habit of paying your future self so that you’ll have the cash for investments later on. High interest savings accounts are a great place to grow your savings, especially if you have the willpower to leave the balance untouched and make regular monthly deposits. You can even try plumping up your super (cue your older self thanking you for it).
Mozo’s in-house property investment guru, Steve Jovcevski, says that getting into a regular savings habit will not only benefit what you can buy later, but improve your borrowing power.
“Try to save about 20-30% of your income in a high interest savings account to show mortgage providers that you have the diligence to make ongoing repayments when the time comes,” adds Steve.
Hack #5 Review and switch
Now’s the time to pull out your broadband, energy, and home loan statements and if you’re not with the most competitive deal, make the switch! Taking a day now to set yourself up for the rest of the year could save you hundreds, even thousands.
Say you have a $500k home loan with a 4.5% interest rate and switch to Mozo’s Mystery Bank Deal with a variable rate of 3.89%. The slight percentage difference could potentially save you $51,076 in interest over 25 years. You could buy a fancy car or upgrade your kitchen with that kind of money! To see how much you could save by making the switch, punch your numbers into our Switch & Save Calculator.
What cash-filled resolutions are on your radar for 2016? If you have a hack you’d like to share, spread the word with a comment below.