Eight ways to get ahead financially in 2018

DON’T fail in that New Year resolution to be better with money. Set yourself up for success with these simple tips.

REMOVING excess financial flab and working out how to get back into fiscal shape after overspending during the Christmas break will be high on the priority list in 2018.

New ANZ research has found 57 per cent of Australians have made a new year’s resolution around money and the reason for it — 32 per cent say if they are on top of their finances they feel more in control.

But ANZ’s managing director of retail distribution, Catriona Noble warned: “Many people have good intentions to set financial goals in the new year but only about half of them actually follow through.”

Here’s eight categories you may need to tighten the belt on.

1. CREDIT CARDS

Australians owe more than $51.2 billion on credit cards.

Reserve Bank of Australia data found the nation owes $51.2 billion on plastic and $31.6 billion is accruing interest.

So if you have a revolving credit card debt it’s time to pay it down.

These nasty little pieces of plastic attract interest charges anywhere between 9 to 25 per cent so if you don’t pay your balance off in full chances are you’re paying a fortune in interest.

Balance-transfer deals — where you switch card debt from one card to another and enjoy interest-free honeymoon periods — are a great way to kill debt fast.

But be warned they do come with fees and charges so pay attention.

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2. HOME LOANS

Aussie Home Loans’ James Symond.

Data from financial comparison website Mozo found mortgage interest rate deals as low as 3.39 per cent for a $300,000 30-year owner occupier loan.

Australians continue to scale ahead on their loans — the average mortgage buffer which includes balances in offset accounts and redraw facilities is more than 2.5 years of scheduled repayments at current interest rates.

Aussie Home Loans’ chief executive officer James Symond said borrowers should give themselves a rate review now.

“If it’s been more than 12 months since a rate review then it may be worth giving your lender a call and asking for a lower rate,’’ he said.

“If you’re an owner occupier paying principal and interest you’ll have more leverage and should be targeting an interest rate sub 4 per cent.”

3. ENERGY BILLS

Kim Clarke urges consumers to contact retailers to see if there are ways to reduce bills.

Energy prices nationally continue to soar and often consumers are left on old deals that leaves them overpaying.

But Energy Australia’s chief customer officer Kim Clarke said there’s “potentially hundreds of dollars a year to be saved off energy bills.”

“Get in touch with your retailer to talk about how you can get back in control of your energy consumption,’’ she said.

Retailers have continued to roll out fixed energy plans allowing consumers to know exactly the rates that will pay for a fixed period of time and not be hit by upcoming price rises, but be sure to check the fees and charges attached.

4. SUPERANNUATION

ASFA’s Martin Fahy says consolidating super accounts can boost your retirement savings.

Having a retirement savings shortfalls is a concern for many people.

The Association of Superannuation Funds of Australia figures showed for men the average balance is $112,000 while for women it’s $68,000.

ASFA’s chief executive officer Dr Martin Fahy urges people to “inquire about the fees and costs in your super fund and look at other funds to see if you might be able to do better in terms of lower fees and higher net investment returns”.

Salary sacrificing is also a good way to boost retirement balances more quickly.

Consolidating multiple accounts is also another easy way to reduce fees and charges, log into your MyGov account online to consolidate all your accounts online in a matter of minutes.

5. TELCOS

Smartphone deals are extremely competitive so customers should hunt for cheaper options.

We are addicted to our smartphones and having web access but it’s costing users a packet.

Telco comparison website Whistleout’s spokesman Joseph Hanlon said deals are constantly changing with frequent promotions and offers flocking on to the market.

“You just have to compare what’s in market and be ready to switch to a better deal,’’ he said.

“We know that people pay an average of about $50 per month for their mobile plan and that this is almost double what they need to pay for a plan including all the features most people use.”

Plans with 5GB or 10GB data start from just $25 to $30 per month, which could save people more than $500 per year.

For internet plans Mr Hanlon said the average internet bill is $77 per month but many people are paying too much and a family could instead be paying just $60 per month.

6. INVESTMENTS

Investors often debate whether investing in shares or property delivers better returns.

Shares, property, savings or cryptocurrencies?

Wealth advisory William Buck’s director Adrian Frinsdorf said setting aside money for investing will help try and boost your wealth.

“Shares overall performed well in 2017 but past performance doesn’t guarantee

future performance,’’ he said.

“All good things begin with a plan so reviewing your wealth strategy now with the

help of your financial adviser will have you starting 2018 on the front foot.”

And for those who love property, prices nationally have continued to grow, CoreLogic data shows capital city home values rose by 4.5 per cent in the past 12 months.

7. SAVINGS

Mozo spokeswoman Kirsty Lamont.

Mozo found interest rates on both at-call savings accounts and term deposits are low.

For $10,000 in cash, the highest at-call savings rate is 3 per cent, earning $304 per year and for a 12-month term deposits they are slightly less.

Mozo spokeswoman Kirsty Lamont said, “savings rates have fallen to fairly drastic lows so help your saving grow by starting the year comparing rates.”

For those with a home loan, Ms Lamont said keeping excess cash in an offset account — a daily transaction account linked to the loan — is a better option because it reduces the interest charges.

8. HOLIDAYS

Booking package holiday deals can be a way to get cheaper flights and accommodation.

For those planning a getaway in the new year keeping an eye out for competitive deals is key to ensure you don’t get stung by booking a last-minute holiday.

Expedia Australia’s managing director Michael Pearson said packages can often be a cost-saver.

“Booking a flight and hotel together is a simple way for Aussies to access a better deal,’’ he said.

“Look for bonus free extras, if you can get things like free breakfast, free spa treatment or free meals that’s a great way to reduce your on-the-ground costs.”

Also flying into smaller cities can help save, rather than flying into popular destinations like London and Paris.

@sophieelsworth

Originally published as Eight ways to get ahead financially in 2018