IMPROVE YOUR FINANCES ONE MONTH AT A TIME WITH THIS 2018 TO-DO LIST
It’s easy to get overwhelmed with a long list of tasks, so we’ve simplified things for you. Just tackle one job on this list each month and you’ll make a huge difference to your finances in 2018.
January: Create a monthly family budget in four steps
Step 1: Calculate your household’s monthly income
Step 2: Work out all your monthly expenses
Step 3: Set up your budget using ASIC’s MoneySmart tool.
Step 4: Stick to it throughout 2018 using ASIC’s TrackMySPEND app.
February: Get a home loan health check
A startling eight out of ten Australians don’t know the interest rate they’re paying on their home loan. Now’s a great time to consider:
– fixing the rate of your home loan
– switching to a principal and interest home loan
– setting up an offset account.
March: Cut back on take-away coffees and other items
Buying a $4 take-away coffee each day costs you a whopping $1460 per year. Making it yourself using a French Press or Moka Pot costs just $260 – a saving of $1200.
Consider other luxuries you can cut back on too, such as wine, beer and takeaway food.
April: Cut up the credit card?
The average card holder is paying around $700 in interest per year if their interest rate is between 15 to 20%.
By now the family budget you set-up in January should be running smoothly. The next question to ask yourself is: do I really still need a credit card if a debit card will suffice?
May: Ask your employer about salary sacrificing
Generally, salary sacrificing is tax-effective for people who earn more than $37,000 a year.
It helps you save on tax by allowing you to forego your salary in return for non-cash benefits, including, car leases, childcare, student loans or superannuation contributions, to name but a few examples.
June: Prepare for the 2018/19 tax year
If you run your own small business, consider the following four tax tips ahead of the 2018/19 tax year.
1. Separate your business and personal accounts to avoid using your business bank account like a personal ATM machine.
2. Establish a second business account to pay tax and GST and assist with cash flow.
3. Stop using cash for business transactions – it’s easy to misplace receipts and miss out on deductions.
4. Learn in advance what you can and cannot claim.
July: Review your insurance costs
Whether it’s your home and contents insurance, your car insurance, or a life insurance policy, by calling three or four insurance companies, getting quotes, and then comparing, you can save hundreds of dollars each year.
August: Ask for a pay rise
If you want to earn more money to put towards your financial goals, consider asking your boss for a pay rise. Here are six tips for broaching the topic:
1. Schedule a time with your boss and inform them of the meeting’s purpose.
2. Know what your industry peers are getting paid.
3. Clearly outline the value you bring to the company.
4. Have reasons ready for why you want the pay rise (children’s education, etc.).
5. Don’t take your employer hostage by threatening to move to a rival company.
6. If you receive a ‘no’, ask for specific KPIs to work towards and ask for a reviewal date.
September: Look into your banking fees
How much are fees eating into your savings and spendings accounts? If you don’t know, find out, then shop around for a better deal.
October: Consolidate your superannuation
If you have more than one superannuation fund, consolidate it by following these steps to avoid doubling up on fees.
November: Start saving about 20% of your pay
Now that you’ve got most of your finances in order for 2018, aim to save and/or invest around 20% of your pay.
The exact amount you aim to put away – and whether you’ll save it, invest it or put it towards your mortgage – will depend on your financial goals. ASIC’s TrackMyGOALS app can help.
December: Set a New Year’s resolution goal for 2019
The December holidays are a great time to sit back and take stock of what’s really important to you and your family. So use this time to carefully consider what financial goals you want to achieve in 2019.
It could be saving up for a long overdue holiday, putting away more money towards your kids’ education, or buying an investment property.
If you’re stuck for ideas, let's grab a coffee and have a chat. We’d be more than happy to help you identify goals, and can also help with other suggestions listed above.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice or a recommendation and may not be relevant to your situation or circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.