The start of a new year brings the opportunity to get your finances in order. You might still be recovering from your festive spend. It happens to many of us and it’s so easy to do. Presents, holidays, house guests and maybe back-to-school expenses drain the pocket. So, where do you start?
In previous articles I have mentioned that the first thing you need to understand is where your money goes. The easiest way to do this is to keep a budget; just a simple spreadsheet recording what you spend.
The important part of a budget is to record everything that you spend, even the cup of coffee on the way to work. Then we have a true spend amount to work with. Remember, a budget does not mean that you cannot have a lifestyle, however it will make you aware of whether your lifestyle is affordable or not.
The second thing you can look at is reducing your debt. Many of us have several accounts and cards, and shuffle money from one account to service another. In the short term this may be effective, but it is detrimental long term as the different lenders and services will come with a host of different fees.
If you’ve ever heard the old saying “divide and conquer” well that is what we do when we have debts all over the place. By sending your money out to different sources its power is weakened. When we have a base point for all our money we strengthen it, so we can actually have every dollar we earn working for us.
The third point today is not to get caught up in the hype of interest rates. They continually rise and fall, and the lows and highs may not affect you as much as friends at your dinner table or BBQ tell you. It is easy to get swept along with the crowd, particularly when media outlets are plugging it as top news.
Finance is not a one size fits all so working with professionals in the industry will help you to understand exactly what importance an interest rate has on your overall financial situation. Even if you feel in control of your finances and your future plans, it is still good to get them reviewed every couple of years.
Laws and policies constantly change and if you are like any normal family, situations and events that need unplanned dollars frequently sneak out of left field to surprise you and keep you on your toes!
Last but not least, always ensure the professionals you ask for support are qualified experts.
If you would like a free consultation to learn what you can achieve with your current situation chat with Angela. She'll help you set a plan for your finances and for future borrowings you may need.