Back to work? Get your finances in order for the year ahead

Everyone talks about ‘back to school time’ but what about back to work time? January can be a hazy month for many and we’re not just talking about the heat. Many Aussies choose this time to take a few weeks off work to enjoy the Christmas break and a much needed holiday. The question is how do you get your finances back on track after taking time off?

Resetting in February

We’re going to go out on a limb here and say that the first month of the new year is not the best time to set resolutions. A lot of people are on holiday and not many really want to cut back on their spending, or go on a detox. In fact, we think February is a much more fitting time to write up new goals. By this time you’re more likely to be back at work and into the swing of things again.

So don’t be disheartened if you haven’t set any resolutions just yet, on our watch there’s still time! On a piece of paper, write down the five biggest financial goals you want to get in the bag by the end of 2021. This could be something you want to save for, something you want to pay off or even something you want to learn more about.

All about the journey

Now that you know what your financial aims are, you can set about creating a plan to achieve them. Here are a few ways to do this:

• Create a budget. This could be on a savings app, in a spreadsheet, or simply in a notebook. Whatever works best for you.
• Do some calculations. To pay off lingering credit card debt, work out how long it will take to get the balance down to zero with minimum repayments or look into a balance transfer deal.
• Set intentions. Maybe budgets aren’t your thing, so why not set intentions instead? This could be to put 20% of your income into a high interest savings account. Or, to buy most things pre-loved to save money. Write down your intentions and make a point to stick to them.
• Improve your credit score. If your goal is to be approved for a home loan, then improving your credit score might be part of your plan. 
• Educate yourself. Lastly, you might want to try something new, such as investing. If that’s the case then make sure you do your research first. You could do this by reading a book on the subject, following experts on social media, or even watching YouTube videos.

The right (financial tools)

To make your plan a reality, you’ll want to make sure you have the right financial tools. Depending on your goals, this could mean:

• A savings account that serves you well. What this looks like is up to you. It could be one with a competitive interest rate, or one with handy features that help you save.
• A balance transfer credit card. A number of providers offer credit cards with a 0% balance transfer rate for a limited period of time. Just make sure you can pay off your debt in that time. It’s also a good idea not to make any new purchases with this card, as these will come with a much higher interest rate.
• A home loan with a low interest rate. With home loan interest rates at an all time low, now might be the time to lock in a more competitive rate. Just make sure you also note what fees and features come with the loan, before signing up.
• A car loan with fewer fees. To finance a new (or secondhand) set of wheels, you might need a bit of extra cash. Compare car loans and work out what future repayments will look like. Take into account the interest rate and any fees that apply.
• Switching to a provider that better reflects your values. Finally, your 2021 financial goals might be to learn more about what your providers are doing with your money. If that’s the case then make a point to read up on B Corp companies, think about switching energy providers and look into how your super could shape the world we live in tomorrow.

Review, rethink, rewind

To finish up, don’t let your plan go stale. Review it regularly to make sure you’re still on track. If things aren’t working out how you would have liked, rethink it. Rewind and make some tweaks, or come up with a new plan. 

It’s important not to be put down if something isn’t working. Constant change and development is after all the key to progress.