January is a busy month, but it might also be the best time to review your finances. You can decide what you want to achieve in the coming year and set yourself up for success!
So here are our top tips that will help you achieve your financial goals.
1. Make a plan
It’s hard to achieve any goal without a plan.
It’s important that you have some clarity on exactly what it is you want to achieve. When it comes to your finances you need to be specific.
Make sure your goals are measurable. Set that due date, give yourself a timeline, know exactly when you want to achieve them.
When you’re making your plan make sure you break it down into steps. If you’re planning to afford a holiday, pay back those debts, buy your first investment property…. these are all big goals! So make sure you break them down into daily action. This breakdown makes your goals both manageable and measurable.
Stick to the plan
It can be really easy to let everyday life get in the way of your goals. We don’t want you to get distracted or drift off course!
Understanding what you want and why will help you stick with the plan. Remind yourself why you want and need to achieve this goal.
Get use to reading this next part, you’ll see it a lot. Find a money mentor!
Having a mentor that can hold you accountable to achieving those daily tasks can be invaluable. Weekly or monthly check ins will help you stay on track. Take these small steps day by day and you will find success at the end of the year.
2. Pay yourself first
When you pay yourself first we’re really asking yo to prioritize yourself and your future.
Make sure you’re allocating a percentage of your income towards investing in your future, emergencies and the goal you created!
Paying yourself first is the number one thing you can do to improve your financial position. Typically in Australia we pay our bills firsts and spend what’s left in the account. What you need to do is allocate a percentage of your income to yourself. This amount needs to go into a separate account. You can’t touch it before you pay your bills and other expenses. These payments can be split into an investment fund and an emergency fund, so it’s purpose is clearly marked.
Many people are worried about losing a percentage of their income to long term savings over increased short term quality of life. But once you have allocated a percentage that suits you, you’ll find you don’t need as much of your income to maintain your lifestyle! You can adjust your living expenses to reach your goals. If you’re still not sure how much you can be allocating, here’s an example:
- 50% towards essential costs (e.g. mortgage or rent, loan repayments, food and other necessities)
- 30% for personal expenses (including enjoyment)
- 10% for emergency fund
- 10% for investment fund
These amounts can be adjusted to whatever capacity works for you. But it’s important to prioritize your future!
3. Review your debts
Most people don’t know that there are two types of debt! It’s really important to review your debts and pay down those bad debts as quickly as possible. To read more about the difference between good and bad debt, read out blog here!
Paying down bad debt isn’t the only thing you can do. Reviewing your mortgage or looking into your debt consolidation or refinancing options could reveal some opportunities to save. Interest rates are constantly changing. making sure you’re actually getting the best rate is really important!
One of the things that could really help you here is a financial plan. Knowing where you’re going and how you’re going to get there is an important way of tracking your progress.
How to do a financial plan
Doing a financial plan doesn’t have to be a big overwhelming process. We know it can seem scary but it will really help keep your goals clear. The things you want to change to improve your money management are probably simple things. Your goals could be as simple as growing your savings for security, or a car, or maybe a holiday. These types of goals can be achieved by your own money management.
If you have some big goals this year, it might be more difficult to manage yourself. We are so excited for you to achieve your dreams. So speak to your Rise High mortgage broker so we can make your goals the exciting and motivating experience they should be!
4. Invest in your future
It’s never too late to start securing your financial future!
Sometimes we can forget to plan as long term as retirement. If this is you, now is the time to start. We want your finances to match the expectations you have for your future lifestyle. It’s really important to get some great advice with this one. Connecting with your team of experts can help makes sure you’re planning ahead. This includes thinking about investment properties or shares. Somewhere you can put your money for a compounding effect that will grow your nest egg. Building these personal assets outside of your home and giving yourself a passive income so you have the financial capabilities to retire whenever you’re ready.
Meeting with your mortgage broker or financial planner will help you achieve these long term goals. It’s never to late to start! Build the future that best fits your wants and needs.
5. Get a money mentor
We’re all stronger with the right people around us. So we can’t stress enough how great a money mentor is! Your money mentor can give you guidance and hold you accountable. Even if you feel confident with your own money management, they are someone you can rely on. Early on in your journey it can be easy to get off track. Your mentor can help you remain focused on what you’re trying to achieve. You can eliminate those everyday life distractions and stay on track!
As you’re achieving your goals you’ll develop better money management habits. These habits will help you keep achieving long after you’ve celebrated that first goal.
If you would like help to achieve your financial goals Rise High is here to help! Fill out the form below and we’ll get back to you about beginning your financial journey.