The arrival of a new year heralds a new lease on life and a desire to make ‘this year’ the best yet. We make time to sit down with brand-new diaries to map out the next 12 months. We sign up for expensive gym memberships or start new diets; we resolve to stop smoking or use our smartphones less. Then by March 12th we’ve fallen off the wagon and gone straight back to square one.
While it’s not easy keeping resolutions, there are some that are worth making more of an effort for – like your finances.
Whether you like it or not, money makes the world go ‘round. It makes sense, then, to get a handle of your finances because staying in control of your life will literally change your life. Need a prod in the right direction? Here are a few ways to make 2019 the year of your finances.
Make the Decision – Then Do It
Regaining control of your finances isn’t a dumb New Year’s Resolution so don’t treat it like one. It’s also not particularly easy. If you’re really serious about changing how you manage your money, you’ll be willing to make sacrifices to make it happen. Parents and close friends can be helpful encouragers too; you don’t need to tell them all the nitty gritty details (like how much debt you have to pay off or how much you want to save in the next 12 months) but if you know that there are some people on your side, it’ll be much easier than facing it alone.
Start Planning for the Future Now
Superannuation paid by the government isn’t a lot (a couple who are both retired will earn a combined $616.72 a week, which when you think about current rental prices will disappear quicker than you can say ‘retireme..’). Therefore, in order to enjoy the kind of life you live now when you retire, you’re going to need a significant top-up.
The jury’s out as to how much you need to retire comfortably; some people say a cool million bucks is essential while others say much less is required. The fact remains, though, that the average Kiwi isn’t going to survive on superannuation alone.
If you’re not already saving for your retirement via Kiwisaver, you need to enrol today. The best thing about Kiwisaver is that once you fill in the paperwork, you don’t have to do anything else; 3%, 4% or 8% of your salary (you choose) will automatically be deducted from your pay before you even see it and squirrelled away in a trust that you can access when you hit 65 (or when you buy your first home). If you work for a company your boss will top your fund up too, plus you can earn tax credits from the government.
Smash Your Debt ASAP
There are few things more discouraging than seeing a whole lot of negative numbers in your online banking. If you’ve got debt – any kind of debt – make it your mission this year to get rid of it. If you’re a slave to your credit card, firstly cut it up then skimp and save as much as you can every week to get rid of the balance. The same goes with paying your parents back for that money you borrowed when you wrote off your car, or for that personal loan you got from the bank to buy that new lounge suite you most definitely needed
Debt limits your ability to save and spend comfortably. It also impacts your credit rating, which means you might not be able to get a mortgage further down the track or even simply sign up for a new phone plan.
Start a Savings Plan
Once you’ve got rid of your debt, start putting the money you were using to pay it off into savings – you’ll be surprised at how quickly it adds up.
Savings give you the power to do the things you love to do, like travel, buy a car or even buy a house. It’s also wise to have access to an emergency fund of around three months’ worth of your household’s combined salary, just in case things turn a bit pear-shaped at work and suddenly you’re out of a job.
Become an Active Manager of Your Finances
Do what you’ve got to do to stay in control of your bank balance. For some people, it might be maintaining a spreadsheet that outlines where every cent you ever spend goes. For others, it might be creating a load of dedicated bank accounts for different purposes (like Power & Utilities, Daycare, Petrol, Groceries or Fun Times). What works for you might not work for other people … but you don’t need to worry about other people.
Become an Active Investor
Investing has got to be the best way to get more bang for your buck – literally. If you’re a first-time investor, the ‘I’ word doesn’t have to be scary though.
If you don’t have oodles of cash on hand, buying a house or investing oodles in the stock market might not be an immediate option. But that doesn’t mean you couldn’t invest as little as $100 into PropertyShares from The Property Crowd, putting $5 a week into a platform like Sharesies, or starting up an investment collective with your nearest and dearest. Yes, there are risks associated with investing, but there are plenty of other risks in life and that didn’t stop you from trying out a Lime scooter, did it.
Keen to have a go at investing but not sure where to start? Learn more about investing today.
… Wait, investing as little as $100 into PropertyShares from The Property Crowd? Does that mean buying property? Why yes, yes it does. You don’t need a massive deposit or trust fund to get on the property ladder anymore. The Property Crowd lets the average Joe and the more experienced property investor alike purchase property with the power of other people. Find out how The Property Crowd works today.
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