This will leave you with extra money in your pocket
DUSTING off your debts and spring cleaning your finances can help put you in tip top shape and ensure you have rock solid financial stability in years to come.
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DUSTING off your debts and spring cleaning your finances can help put you in tip top shape and ensure you have rock solid financial stability in years to come.
We’re almost a quarter of the way through the new financial year so it pays to take the time now to get your finances in order now and set yourself up for a fiscally healthy 2017.
We’ve asked the experts for some easy ways to tidy up your money matters and leave your finances blossoming.
CREATE A BUDGET
Many people dread budgeting but it will pay off if you take the time to work out your incomings and outgoings.
A good approach is to divide up your finances and have one account for spending and one account for saving, says Rising Tide Financial Services’ managing director Chris Browne.
“Live on 80 per cent of your income and set aside 20 per cent for a rainy day by having that deducted and set aside into a high-interest, no fee account,’’ he says.
Also jot down your weekly expenses, factoring in rent, mortgage, utilities, insurance cover, childcare, groceries, petrol and any other costs that have to be paid regularly.
PLASTIC DEBT
Consumers already owe a whopping $52.2 billion on credit cards and more than $32.9 billion is accruing interest.
Yellow Brick Road wealth manager Greg Bloom says borrowers should rein in their spending on plastic and shave down what they already owe.
“People get caught up in it and struggle to get out of it,’’ he says.
“Paying down your credit card debt as soon as possible is important, where relevant get rid of all forms of short-term debt.”
Balance-transfer deals where you transfer your debt from one card to another and enjoy an interest-free honeymoon period can be a much quicker way to pay down plastic.
SET SAVINGS GOALS
Bloom also says it’s important to make your finances sparkle by setting up a realistic savings plan, particularly if something goes wrong unexpectedly.
“Make sure you have a buffer, a lot of clients are living day to day, so try to put aside three months of your salary,’’ he says.
“Have money available (so) that if something happens — you get injured or you lost your job — you wouldn’t be out on the street and defaulting on any debt.
“Work out what your surplus is and make up a forced savings plan.”
SWITCH LENDERS
Hundreds of home loan interest rate deals on both variable and fixed rate loans are below the four per cent mark which should prompt borrowers to review their loan and see if they can nab a cheaper deal.
Browne says for borrowers “knowledge is power” so before you contact your lender, do some groundwork.
“Make sure you are armed and dangerous, do you research, there are heaps of financial comparison websites to see what other lenders are offering,’’ he says.
“Once you have that information call your service provider and tell them, unless they beat the deal, you’re leaving.”
Mortgage brokers can also help you do this if you don’t feel comfortable or knowledgeable enough to get the best possible deal.
REVIEW YOUR FEES
Reserve Bank of Australia figures reveal last year households paid about $4.3 billion in bank fees so now is the time to sweep up that money you’re shelling out on unnecessary charges and put it back in your own pockets.
There’s a range of transaction accounts that are fee-free and there are plenty of no-fee credit cards too.
Originally published as This will leave you with extra money in your pocket
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