There’s little debate around 2020 being a turbulent year for most, meaning it’s very likely that your New Year’s Resolution was put on dramatic hold or thrown out the window completely. Simply ‘wishing and wanting’ is no longer sufficient. It’s time to buckle down and get serious about your goals this coming year and put a plan in place for achieving your exciting financial endeavours. Here are 5 money goals to consider.
Stick to a budget
If you’re a frivolous spender the idea of restricting yourself to a budget may be foreign and feel downright restricting, however, consider it as a tool rather than a trap to allow you to become more financially conscious and make decisions based on an overruling goal. Yes, you may have to forgo your daily $5 latte and nail down your needs versus your wants, but in return you will have far more control over your finances and allow you to stay focused on your long-term goals.
A budget can be achieved via:
- A budgeting spreadsheet
Accurately monitor your spending and manage your money with a spreadsheet outlining your consistent income and expenses. There are many FREE budgeting spreadsheets, readily available online for your download and use, simply fill it in with your specified expenses and continue to refer back to it.
- A digital envelope system
Funnel your money into category envelopes including rent, petrol and groceries, then at the end of the month review how much money remains in each. It will give you a good indication on which category you spend the most money and offers opportunities to refine your spending to eliminate clutter.
If you review your budget weekly, it will be much easier to stay on top of your incomings and outgoings. It doesn’t haven’t to be a stale, serious experience: schedule regular budget reviews by taking yourself to a café for a coffee or even combining the exercise with a friend or your partner over a meal.
Create an emergency fund
If COVID-19 has taught us anything financially, it’s to prepare for the unexpected. In 2019 we never could have predicted the economic consequences of coronavirus including job loss, business closure, travel restrictions and international supply chains.
An emergency fund can act as your safety net and covers you in the event of an unexpected financial hit, ideally assisting you from going into debt. It can also provide immense peace of mind that you have a plan in place if the time came where you became unemployed or were diagnosed with an illness or injury preventing you from working.
Whether it’s a student loan or credit card debt, use 2021 as the year you begin to take bigger strides to eliminating debt once and for all. If you need help, consider the snowball method which involves paying off debt progressively from the smallest to the largest balance. Every time a debt is paid off, you then funnel the money that would have been used for that debt, to paying off the next in line until they’re gradually disintegrated.
Look into and learn to invest
If your New Year’s Resolution involves building wealth, learning to invest is a valuable skill that will bring you closer to achieving a passive and ongoing income stream. There is an abundance of resources in the market including books, podcasts & blogs to assist you in your learning venture, as well as taking opportunities to network with and discuss techniques with established investors in-person or across social media platforms.
Increase your income
The Australian Bureau of Statistic’s latest Household Income and Wealth Australia 2017-18 report, released July 2019, reflects that income growth has been virtually non-existent, with household income becoming stagnated and achieving practically no growth since 2013.
Perhaps 2021 is the year you begin to invest in stocks, start a business venture or go for that raise at work. Whatever method you decide to take to increase your income, ensure that you keep this goal in mind each day, taking daily, progressive steps to your desired monetary outcome.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.