The New Year is all about resolutions and goal setting. But why is it that this time next year most of us will be making the same resolutions that we had this year? If you don’t put your good intentions in to action then they will always remain simply that – intentions something that you know you should do but just never quite get around to doing it.
It’s really interesting to see that Christmas doesn’t seem to be the same frenetic chaos with overindulgence in spending and eating that it used to be. It’s great to see that people are enjoying a more relaxed time with family and friends rather than having huge lavish Christmases, spending exorbitant amounts. But still Christmas can leave us with residual debt that we could well be paying off until this time next year! So why not set up an Automatic Payment right now for a regular weekly amount to put in to a Christmas account. If you only put aside $20 week by Christmas this year you’d have $1,000. Or up it to $50 week and have $2,500 – enough for Christmas and a little break.
For all those who failed to notify family that this year was going to be the budget year for Christmas presents or you were only buying for the kids but you were too late – then get in now. Set rules for Christmas now before anyone has gone and purchased some of your family a really expensive present that you feel obliged to try and match.
Other great ideas in how to better manage our cashflow throughout the year can be seen with large regular expenses that arise such as rates. It is a big amount that comes around quarterly leaving most of us rushing to check that there are sufficient funds to cover the cost. You can pay your rates monthly or every weekly. Get down to the Council and pick up an Automatic payment form and take it straight to your bank to set up a weekly payment to pay your rates.
Make sure your financial obligations (debts) are paid first before anything. This reduces the stress in and hassle in trying to work out if you have enough funds in reserve. Check with your lenders if you are able to make your loan repayments at the same regularity as you are paid. If you are paid weekly then ask for your payments to be made weekly. And then change the date so that it matches up with your pay dates so for example the payment comes out the day after you are paid – that way you know that you don’t have to keep allowing for repayments to be coming out later when your pay is but a distant memory!
We always advocate a banking programme when operating your accounts. Whatever system works for you but it’s a great idea to have separate accounts for for different uses. Set up a budget and work out what you need each week/month or fortnight. Then allocate the amounts in to each account. One such example is the following:
Account 1: “Eftpos” account where the Eftpos card is only linked to this account. Any Eftpos transaction comes from this account eg groceries, petrol, entertainment etc.
Account 2: “Bills” account which can be a cheque account or similar. A weekly/fortnightly or monthly amount (depending on how often you are paid) goes in to this account and allows you to set aside money for regular monthly bills or even irregular maintenance, car and household expenses.
Account 3: You should always have at least one savings account. At the minimum this should have emergency funds in case there is an unexpected bill that crops up but you don’t limit yourself to just that. You could have savings for all those items that you really want but would only get if you put them on hire purchase or went without. Paying for cash means keeping the Debt Demons at bay. Plus the feeling of satisfaction when at the end of your hard work you have this lovely purchase should not be underestimated. It sets up a positive reward for saving as opposed to the negative feeling that long after you’ve purchased your item and the novelty has worn off you’re still paying for the jolly thing!
This is basic common sense and we’re not telling you anything that you don’t already know. It’s like losing weight – you know what you have to do ie diet and exercise. Yet so many of us don’t put this in to action. Let this be the year of taking control of your finances and moving forward as opposed to consistent struggling just to maintain where you are.
If you need help to put this in to action then go and get it. Contact your Financial adviser and get them to work with you to create a plan. Often with that little push it will be the beginning of a whole new way of life.
