2022 has so much potential to be an amazing year, especially if you start it by getting your financials in order! Organising your finances by writing down goals, and steps to achieve them, will ensure you stick to your financial plans. We’ve complied our top three tips that can easily be kept to, for your 2022 resolution. Start this year on the right foot in order to achieve your goals, and we’ll be here to help along the way, should things get a bit too complex.
- Save More and Set a Budget You Can Stick To
If we could only provide one tip to get your financials in order, this would be it: work on your savings! Set a budget and be conscious of saving and not over-spending. Sounds simple, right? So why is saving not that easy for some? It could be because small purchases are often overlooked, compared to those that are obviously more expensive.
We’re not telling you to stop spending money on luxuries all together, but instead, we suggest sitting down and calculating your yearly spendings and analysing categories you spent the most on in 2021. For example, for some, a morning pastry or muffin from your local cafe is a small luxury, and because it’s only a few dollars each day, most would skim straight past this! If you can cut it out by bringing your morning tea from home, that otherwise spent money can form the foundation of your savings account! Muffins or pastries can cost anywhere upward of 3 to 4 dollars – so if you’re buying one each day, that’s over $1,200 spent in a year! So, we suggest analysing even the smallest of purchases and finding a more affordable alternative, as a starting point for your savings.
An easy place to start how much of your hard earned money should be saved and spent, is following the 50-20-30 rule. A rule simply put as, spending 50% of your income on essential purchases, saving 20% and having 30% left over, which is allocated to discretionary, non-essential purchases.
If you need assistance in setting up a budget and assessing your spendings, assets and savings, our team will be able to assist you as needed.
- Review Your Insurance Policies
Reviewing your various insurance policies can be a great way to see if you are overspending, for the same benefits, compared to a competitor. Alternatively, reviewing these policies could allow you to see what you’re covered for, which you might not need.
Bundling insurance packages are becoming more popular, swapping to a provider that can provide life, car, pet and home and contents insurance may offer a discounted rate due to using their services for insurance across the board.
- Pay Off Loans and Debts
When planning your budget, we highly recommend allocating some money to paying off loans and debts. While paying these off will minimise actively saving, it’ll pay off in the long run. Paying off loans and any other debt early, reduces long-term payments with interest rates. House Loans in particular can often span across decades – and the harsh truth is that your house (generally speaking) won’t get bigger, but interest rates will – paying this off early could save you tens of thousands of dollars in the long run. Similarly, eliminating monthly payments (for large loans like those for a house or car), frees up cashflow, which can then be put to other savings.
If the thought of getting your savings and finances in order is daunting, or you simply don’t know where to start, we’ll be here to help! In the New Year, we can setup a time to meet and discuss, and create a tailored financial plan to suit your needs of how best to proceed and get your finances on track for 2022.
Contact us today on (08) 7228 6111 to discuss how we can help take care of this for your business.