Our Top 5 Financial New Year’s Resolutions you should consider.

The new year is finally here, and with a new year there will be more challenges (hopefully nothing like what 2020 threw at us) to overcome. A great way to instil ourselves with will power and determination is to decide upon one or more New Year’s resolutions. Let’s go through 5 great resolutions that could help you financially in 2021 and lead you further down the road to financial independence.

1. Create a budget or spending plan

Creating a budget or spending plan is one of the best things you can do to help shine some light on where your money is going and what it’s going towards. 

Start by working out your weekly or monthly expenses such as rent/mortgage, food and utilities etc, and compare it to your income. Then, create sub-accounts within your online banking that will be used to place money from your income into based on your expenses. Use your main transaction account for your everyday expenses, then based on your preferences you might like to have sub-accounts for things such as savings, fun money, investing and more. 

Make sure you stick to your budget or spending plan to ensure you stay on track. If you would like to learn more about it then check out our previous article called “To Budget or not to Budget” and you’ll be a pro in no time.

2. Get out of debt

Following on from the above, a great resolution is to reduce or completely erase any debt. Whether it be a car loan or credit card, these types of debt are often paired with much higher interest rates compared to that of a home loan. Using your newly acquired budgeting skills, you should use any left over funds from your income to pay down these debts first. A great idea is to consolidate these debts into one so it’s easier to manage.

3. Pay down your mortgage faster

Once you have have abolished the credit card and other high interest debts, we can move on to the big one! Paying off your mortgage can be an extremely lengthy process, and even with the currently low interest rates, over twenty or thirty years it can still add up to a significant amount of wasted money. By paying off your mortgage even by a few hundred dollars above the minimum amount each month, it could potentially save you tens of thousands of dollars over the lifespan of the loan.

4. Start a savings account

Once you’ve started making progress on your debt, you should start thinking about getting some savings together. The more frugal you are with your spending habits the more you’ll have left to save. Saving for a house deposit, holidays or investment opportunities are a few popular things to save for, but just by having that extra money will provide you with more safety in case something unforeseen happens that you need money for.

5. Start investing

Our final New Years resolution that could help set up your financial future is to start investing. There are many ways to invest that you could consider. A few of the most popular ones are:

• Shares

• Managed Funds

• Investment Property

• Investment Bonds

• Superannuation

By setting aside some of your income to go towards investing, you could greatly enhance your potential for more income.

Using the above tips to your advantage will put you well ahead of the pack on the road to financial independence and give you the best opportunity to keep you and your family financially safe. For any questions or help with anything we’ve outlined today, contact us for an obligation free initial consultation - 0423 313 486 or kate@solacewealth.com

Kate Trost

Senior Financial Adviser and Director of Solace Wealth Management (AR numbers 465078/1262350)

Authorised Representative of Avana Financial Solutions (AFSL 516325).