Make some New (Financial) Year resolutions

You’ve heard about Christmas in July. Well, how about New Year’s Eve in July?

You can party if you please, but you might also want to make some resolutions. With, of course, a focus on your financial wellbeing.

Of course, you can make positive change at any time – it's never too late to quit smoking or eat sensibly and exercise within your limits – but now is a particularly good time to look at your finances, because:

• If you do a tax return, you’ll have an idea of what you owe or what you’ll get back from the Tax Office. 

• You’ll be aware of new rules and regulations that may affect you – such as those we mentioned in this article last month. 

• It’s winter and the weather’s perfect for staying indoors poring over your future finances.

Setting resolutions for a new financial year can help you improve your financial well-being, calm your concerns, and set yourself up for success.

Here are some resolutions you may consider:

• Create a budget. Establish a detailed budget that includes your income, expenses, savings goals, and debt repayment plans. You may be surprised how far your money will have to stretch – or you may be lucky enough to “find” a little extra cash for the occasional treat.

• Set specific savings goals. Whether it's building a “rainy day” fund, investing, or putting something aside for family members, know what you want to do with your money. Automate your savings by setting up regular bank transfers.

• Reduce debt. Take control of high-interest debt such as credit card balances or personal loans. Prioritise debt repayment over discretionary spending.

• Track expenses. Keep a record of all your expenses to gain a clear understanding of where your money goes. If you have access to personal finance apps or spreadsheets, and you know how to use them, then they are excellent tools to help you identify areas where you can cut back and save.

• Review and adjust investments. Have a good look at your super and other investments to determine if any of them are underperforming or there are better options. You should seriously consider seeking advice from a qualified professional before making any changes.

• Review insurance coverage. Look at all your insurance policies, including health, life, home, and car, and make sure they are fit for purpose. Ensure you have adequate coverage and update policies as necessary to protect your financial well-being.

• Improve financial knowledge. Commit to expanding your financial literacy. Read books, attend workshops, or take online courses to enhance your understanding of personal finance, investing, and money management.

• Increase income. Explore opportunities for “side hustles”. Even in retirement, there might be some small thing you can do to make a little extra.

• Plan for taxes. If you had to pay tax this year, or your return wasn’t as good as you hoped, look at ways you can work smarter this year. Also, keeping records as you go will make things much easier when 30 June rolls around next year.

• Review goals. Are you still working towards retirement? Maybe there are things you can do to get there quicker, or to have more in the pot when you do finish work. Regularly evaluate your financial goals to ensure they align with your circumstances and priorities.