How to get financially fit for the new year

Kate Browne is the managing editor and personal finance expert at Finder, Australia’s most visited comparison site, and has more than 15 years of experience as a consumer affairs journalist, editor and media commentator. Her work has been published in the Sydney Morning Herald, News Limited and the ABC.

We’re all ready to put 2020 behind us, and while we can’t control what 2021 throws our way, one thing we can control is our finances – and a fresh new year is a great opportunity to refresh our budgets.  

A recent Finder survey of 1,004 Australians has revealed that more than two-thirds (69%) of Aussie men are stressed about their finances. With Christmas and summer holidays almost upon us, along with those extra costs at this time of year, I’d like to share a few of my best tips for getting financially fit for the new year.

Review your subscriptions

We have so much choice available when it comes to entertainment but all those subscriptions can put a dent in your budget. Streaming services can cost anywhere from $6.99 a month for Prime Video to $74 a month for Foxtel Sports HD, and multiple subs can add up. If you commit to cutting just one service from your viewing roster you can put at least $130 back in your pocket over the course of a year. 

Many services allow you to cancel and restart your subscriptions on a month-to-month basis so the trick is to choose a couple each month that you want to use and pause the others until a later date.

Consolidate your debt

Finder research reveals that nearly a quarter (24%) of Aussie men will primarily be putting Christmas on credit this year. While credit cards can be handy for covering the cost of Christmas, you don’t want to wake up with a debt hangover come January 1st.

If you’re repaying debt on multiple credit cards, there’s a good chance you’ll be paying multiple sets of fees, as well as repaying separate interest on each of those. One savvier option is to move that debt to a 0% balance transfer credit card. This will give you an interest-free period of up to 30 months, as well as easing a bit of stress by only having one payment to focus on.

Set a budget

Once you’ve looked at your debt and taken a closer look at your financial status, it’s a good time to think about setting a budget for the year ahead. I know this is easier said than done and it’s one of those things that sits on everyone’s to-do list, but I have a super-simple approach that’s not only easy to remember but to stick to as well.

It’s called the 50-30-20 rule. The basic premise is that you spend 50% of your after-tax income on essentials like your mortgage, rent, groceries or insurance, for example. A further 30% can be used for non-essentials like clothes, eating out and leisure activities. The final 20% is committed to savings or repaying debt. Allocating your money ahead of time is a great way to keep track of your spending and avoid overspending in the new year.

Figure out where you can grow your money

With many savings rates from the Big Four banks sitting at record lows, it’s worth considering investing in shares as a way to make money while you sleep. 

Unlike a savings account, the money you earn from investing comes with an element of risk, so research thoroughly before you invest and think about investing in areas that you’re interested in. This way you’re likely to be more knowledgeable about the industry and more likely to stay up to date on what’s happening. 

If you’re not ready to dive right into share trading, micro investing apps like Raiz or Spaceship are a fun and (relatively) safe way to dip your toe into first-time investing. You can invest small amounts of money, and choose your portfolios based on the level of risk you’re comfortable with.

The new year is always full of good intentions that can go awry, but with these really simple tactics you can easily get on top of your money without a lot of effort. And while it might seem challenging at first, your stress levels and your wallet will thank you in the long run.

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