It’s a new year and that means new goals, right? There’s no better time to start getting on top of your finances than in 2021. Turning those dreams into reality is more than possible if you put your mind to it.
And to make sure your goals are achievable here are five things you can do to put your finances back in order and stick to it.
1. Create a budget
Budgeting is the best way to get your finances in order. Start by writing down all of your bills and outgoings. Then make a wish list of items you’d like to include in your budget.
Add them up, compare it against your income and work out what can stay and what can go. The thing with creating a budget is you actually have to create it. We mean physically write it up. When you create a budget you
2. Consolidate that debt
Let’s make a plan to get you out of debt. For good! There are plenty of ways you can get yourself out of debt or to at least streamline your debt and make paying it off more achievable. Refinancing your home loan to consolidate personal debt such as personal loans, car loans or credit cards is a great idea.
This allows you to have all your debt in the one place and it will most likely be paid off against a much cheaper interest rate than a personal or car loan for example.
3. Save, Save, Save
Have you always wanted to save for a deposit for a house? Then let’s do it! The best way to start saving is to live on less than you make. Basically if you spend less money than you’re paid each month you can put the left overs aside. Go back to your budget and look at what items you can live without or can cut down.
You’ll be surprised how easy it is to find extra cash. Once you’ve figured out how much you can save, set up a direct debit into a savings account and keep it there. When it comes time to apply for a home loan, having a dedicated savings account with consistent savings will allow you to be seen more favourably by lenders.
4. Pay off your mortgage faster
Yes this is possible! And the first place to look is at your interest rate. If you’re paying anything above 3% chances are you’re paying more than you need in interest. By talking to your mortgage broker about securing a lower interest rate you have the ability to not only put thousands of dollars back into your pocket but to also pay off your home loan quicker.
There is never a bad time for a home loan health check but no time in history is better than right now with super low interest rates and lenders offering cash backs to cover the cost of the inconvenience of shifting lenders!!!
5. Plan for your dream retirement
Do you have a picture of how you’d like your retirement to look like? Will you travel, spend more time on your hobbies or see the grandkids more often? When it comes to working towards a dream retirement the people who are most content and happy all have one thing in common – a plan.
By following the above tips and clearing your debt you’ll be more on track to live a comfortable retirement lifestyle.