Decreasing your debt
A lot of people make new years resolutions with fitness goals in mind. From dropping a few kilos to starting to get back into jogging, fitness seems to be on our mind when it comes to setting goals. But what about financial fitness? This article is going to over some of the fitness tips you need to get your financial house in order.
Tip #1: Set goals for yourself!
No matter what position you’re in financially, you should always have a goal. Maybe it’s to get rid of your debt, maybe it’s to start saving, or maybe it’s to increase your superannuation contributions. Whatever the goal is, giving yourself something to strive towards provides a lot of direction – a critical element of being financially healthy.
So take a few minutes now and write down what it is you want for yourself, and what steps might support you getting it!
Tip #2 Ditch the debt
Australians as a collective people owe over $50 billion in credit card debt alone, and even a ‘small’ debt of $2,000 could take years to pay off if you’re not careful. Debt is a huge concern for this nation, so maybe it’s time you ditch it.
How? Make a plan, focusing on the highest interest rate debts first, and then the lower ones until it’s all gone. As you’re working to get debt free, analyze your spending habits to ensure there isn’t anything you could be doing differently to avoid getting into this situation again.
Tip #3 Manage your mortgage
The interest rate for mortgages is at a low of around 4%. Experts are anticipating this rate to stay the same, if not drop, over the coming years. This means you have a lot more wiggle room to pay down your mortgage right now.
See if you can’t make a few extra payments, or even increase your minimums temporarily, to ensure you’re taking advantage of the low interest payments. Lower interest means more payments being made on your principle debt, better for every one!
This may also be a good time to consider comparison shopping on mortgages or renegotiating your existing debt, as most banks are having to work to remain competitive with current rates.
Tip #4 Consolidate superannuation accounts
Superannuation accounts are great savings tools, but an unfortunately high amount of people are using them inefficiently by holding multiple superannuation accounts. You can boost your savings considerably just by consolidating your superannuation accounts, this will help you to avoid fees and over-insuring your funds.
Another thing about superannuation accounts, consider increasing your regular deposits. Even if it’s just by a little bit. In fact, the Association of Superannuation Fund of Australias CEO Pauline Vamos has advised consumers to try “just cutting back on one coffee a day”. Banking that savings to your superannuation account could earn you an extra $120,000 by the time you retire!
Tip #5 Assess your insurance coverage
The new year is also a great time to assess your current insurance coverage. Do you have the right amount of coverage, or are you over or under-insuring yourself? Are you with the company that offers you the most competitive insurance rates? Taking some time to do a little bit of comparison shopping now could result in significant savings down the line.