5 new financial year resolutions worth trying
The past few years have been quite challenging to say the least. Many of us have come to understand how important it is to have a ‘Financial Plan B’.
Similarly, when we write down our new year's resolutions, we often neglect our financial resolutions. As inflation continues to rise and life becomes more expensive, it’s never been more important to set some financial resolutions to help you feel more confident in the face of financial setbacks.
If you’re not sure where to start, here are some top tips and tricks to help you get your financial resolutions started:
Pay yourself first
This could mean rewarding your future self by contributing to retirement funds, emergency funds, savings accounts and investments each time you get paid (and perhaps even setting up automatic payments to do so). A good way to think of it is that the most important investment is you and your future. If you don't pay yourself first, you run the risk of not paying yourself at all.
Set up a budget
This doesn’t have to be tedious and time-consuming. Check out Mozo’s guide on maximising your savings in 2022 with a budget to help get you started.
Cut back on (unnecessary) spending
You’d be surprised what you’ll find when you start tracking your spending. Do you really need four different streaming subscriptions? Probably not. Do a ‘deep clean’ and ditch any unnecessary direct debits and subscriptions (like that old magazine subscription you’ve never had time to read!). This way, you might have more money to spend on something you’ve always wanted, like skydiving or personal training sessions, for example.
Create an emergency savings fund
As mentioned above, an emergency fund can help put your mind at ease. There's no set formula for building an emergency fund as everyone’s needs and risks are different. However, there are some common themes. A common question many people ask is how do you balance building an emergency fund while repaying debt? In this scenario, it can be helpful to go back to the basics and explore steps two and three. As long as you’re saving a small amount of your paycheck and putting it aside for a rainy day, that’s all that really matters. Every cent counts.
Pay off credit cards/BNPL debt on a monthly basis
Credit card interest rates can go as high as 24.99%! So to avoid hefty interest, you should aim to pay off any credit card debt every month before the due date. The same goes for Buy Now Pay Later. It can be very easy to lose track of what you’ve spent. For example, with ZipPay, if you don’t make your monthly repayments, you could incur a $7.95 fee.
Moral of the story: it’s important to practise mindful spending and always keep track of what you owe.
Sticking to financial resolutions and paying down debt can do wonders for stress levels and your bank balance!
As a starting step, try our Mozo Budget Calculator to help you set a budget so you can better manage your expenses.