As the months of January and February have now passed there is one question you need to ask yourself – are you following through with your New Year’s resolutions?
According to a study by the University of Scranton in the U.S. only 8 per cent of people persist with the promises they make to themselves at the beginning of the year.
While gymnasium owners are gleefully observing an uptick in members, many of them will not become regular patrons and they will be parting with upwards of $50 per month for absolutely no physical return on their fiscal investment.
Before we know it, we’ll all start saying: ‘Where is this year going?’ With that in mind, now is the time to reset your goals and think about your financial fitness.
This year we can expect some heavy financial lifting – with inflation continuing to be a concern and the threat of more interest rate hikes looming. The trick is to break down your goals into bite size pieces which will help you get a sense of satisfaction sooner, rather than later.
After March is over, there will be nine months to Christmas. It might be a little bit frightening, but while last Christmas is still fresh in your mind, calculate the cost of all your expenditure and add 10 per cent to the total and by all means, remember to breathe deeply. Now simply divide that number by 10 and that is the amount you will need to save each month. If that amount is still daunting, then I suggest you slim down your budget to a figure that is less than 10 per cent of your monthly income.
Also, the principle of ‘out of sight, out of mind’ can be applied to your Christmas savings. Open an account with a different bank from the one that your pay is deposited into and set up an auto-debit to send your incremental savings to that account – and when that money leaves each pay day pretend it doesn’t exist.
Now is also a great time to review the return on your superannuation and that can be as simple as logging into your account and reviewing your investment portfolio and risk profile.
Another easy change to make which could save significant amounts is to change your home loan repayments to weekly or fortnightly rather than once a month. Also enquire whether an offset account could be used against your home loan to reduce interest charged, another big long-term saver.
Bear in mind, just like embarking on a weight training regime where you might want to consult a Personal Trainer, for everything wealth related it pays to speak to a qualified financial adviser.
This article first appeared in the Autumn 2023 issue of HLB Mann Judd Perth’s Client Alert.
Peter Speechley (ASIC No.246156) and HLB Wealth Pty Ltd (ASIC No. 428645) are Authorised Representatives of Paragem Pty Ltd ABN 16 108 571 875, AFSL 297276.
The information contained in this article has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned in this article, consult your financial advisor to consider whether that is appropriate having regard to your personal objectives, financial situation and needs.