Happy 2016. The start of a new year is a time when many of us make a resolution to change something in our life that we dont like. Getting fitter and getting our finances under control are two of the most common resolutions made. So rather than you having to make two resolutions, why not make one where you look critically at your finances and you focus your attention on making yourself financially fit.
Burn off that excess spending. Learn how to cut down on those high calorie expenses and start making positive, money-saving changes. Lets look at how you can make this possible.
How to Get Yourself Financially Fit in 2016
The principals of getting physically fit work well on getting you financially fit as well. When you seek to get your body in shape, a personal trainer will typically suggest that you do a little exercise, a lot, and that you start to eat well, by cutting down on those foods that your body doesnt really need, such as sugary treats. The same can be said of getting yourself financially fit. Save a little, a lot, and dont buy treats that you dont really need, such as a coffee on your way to work. Youll be surprised at how quickly youll start saving more, which can go towards paying off your mortgage faster.
The key to saving is to let go of old money-burning habits and to introduce new money-saving habits. In addition, make yourself accountable for what you spend, much like you would in regard to what you eat when youre trying to maintain a healthy weight.
Accountability can be put into place by writing down what youre spending your money on. Most of the time we spend money, but we dont really pay attention to how much were spending, and what weve spent money on. Well just buy items or services without really considering their cost.
However, if you write down what youre spending your money on, then you become aware of your spending habits. This is classified as a budget, and overtime it will allow you to change poor spending habits into good spending habits. Until you are eventually only buying what you need, and youre able to save more.
How You Can Transform Your Bad Habits into Good Habits
First and foremost, set yourself goals. Write down a number of financial goals you wish to achieve, and when you want to achieve each of these goals by. Then one-by-one work through each of these goals.
Next, get yourself into a routine where you reduce what you spend. Only buy what you need, not what you want. If you want to save more, but find that you have little control over your spending, then open a term deposit and ask your employer to deduct an amount out of your wages weekly and place this into this account. This way you wont be tempted to spend any extra money.
Make sure you monitor your progress. The key to implementing change and keeping it in motion is to see how youre going. Look at your bank account and home loan balance. Compare this years balance to last years balance. If you find your savings account balance hasnt increased much, or your home loan has been reduced by much, then its time to review your budget and make some significant changes to your lifestyle.
Reduce the calories. If you find you have too many banks accounts, then consider combining these into one account. This will reduce the amount of annual fees you pay, and it will also allow you to put all of your money to good use. If you dont have an offset account that is linked to your mortgage, then now is the time to get one.
By putting all of your money into one account, and then making this an offset account youll shave hundreds off the monthly interest youll pay on your home loan.
Tips to Turn Your Finances Around
If you find that youre having difficulty saving, but you want to make some positive financial changes in 2016, then here are some tips to get you started.
1. Leave the yeah, yeah, sure attitude at the door. Its time to take control and stock of what youre spending and to look at it critically. Dont put it off, and dont lull yourself into a false sense of security. Its easy to say that youll start tomorrow, or that it wont hurt to buy just one more pair of shoes or that new outfit. But, the reality is if you dont start now, then youll never start.
2. Look at your net worth. Write down what you own in terms of assets. Include vehicles, such as cars, boats and trucks, your home and any investment property, as well as your savings, superannuation and any shares and stock values. Tally-up your worth. If your net worth is not much, then its time for you to improve this. If, however, you find that your net worth is gaining in value, then youre definitely on the right track. By reviewing your net worth regularly, youll keep yourself accountable, and this often drives you to do better in the future.
3. Evaluate your life. Look at your memberships, life insurance and other policies, then review these to make sure getting the best value possible. Ask yourself, Do you use your gym or other memberships? If youre not, then stop spending money on these. Then compare your insurances to others on the market. See if you can get cheaper rates or better value elsewhere.
4. Think like a millionaire. The wealthy spend and invest wisely. So you need to vigilant and find ways to make your money work harder.
Are you seeking to pay off your home faster? Then talk to eChoice now and find the most affordable home loan for you.
Written by eChoice
Since 1998, eChoice has helped more than 50,000 Australians secure a home loan through its network of over 25 lenders and hundreds of loans. Best of all our service is cost and obligation free!