January is a great time to set some good financial goals. But don’t go crazy. Be sure to set small realistic goals that will help you work toward your larger goals.
You may want to start with a large goal such as buying a house or retiring early and then look at the things you will need to do to reach that larger goal. Regardless of your goal, it’s wise to set up a support system to make it easier to reach your financial goals. It’s also important to measure your progress periodically throughout the year.
Consider some of these financial goals to take on in 2021
Revise your budget
Revising your budget can be one of the most important things you can do to be financially successful. There are a lot of people who make a lot of money but are struggling financially because they do not manage their money well. The start of the year is the perfect time to take a look at your monthly budget, reduce spending if possible and make any necessary changes to ensure you can stick to it all year long.
Get out of debt
Getting out of debt is another key step to taking control of your finances. With a focus at the start of the year on getting out of debt you can reduce the amount you pay in interest, and you can utilise the money you’d otherwise put toward debt payments somewhere else, such as your mortgage or investment portfolio. The first step is ensuring your monthly debt payment plan is still scheduled with your bank. If you can increase the amount you have scheduled in your payment plan for items like your credit card you will be able to reduce the amount of interest you pay.
The new year is a great time to sell items around the house like unwanted gifts or items you don’t use anymore. This money can help contribute to paying off your debt. It is also an incredible feeling to be debt-free. You have more freedom to do the things that you want to do. You achieve greater job flexibility and more peace of mind. While it may take some sacrifice to make it happen, it is worth the effort.
Start saving money
2020 saw many of us saving money from the months in lockdown, this newfound habit can continue in 2021. If you currently don’t save a portion of your monthly income, why not start now! This money will start to add up quickly and will help to reach your financial goals faster. If you are considering saving for retirement this additional monthly income can be put towards your superannuation fund
If you are struggling to find ways to save you can start by cutting back on some of your expenses outlined in your budget. Alternating you can do a few simple things like reduce the days you eat lunch or dinner out, reduce your grocery bill or find ways to save on your utilities. Saving can be more effective if you have something you are saving for, as well.
Investing allows you to grow your money at a much quicker rate. There are various options when it comes to investing, you can begin with an investment portfolio, or working towards increasing your superannuation fund for retirement.
If you are cautious of investing because of the current market conditions or because you do not understand how the markets work, please talk to your financial adviser. They will help you understand the risks and benefits of investing and should be able to help you find investments that match your current comfort level when it comes to risks.
If you need help with the financial aspects of your annual tune-up, give us a call on 9232 6800. We’re always here to help.