As the holiday season has come and gone, it’s likely that you will be using this time to reflect upon the year that was, and how you can make the most of the New Year to be.
In terms of your finances, it is typical that your spending was likely higher over the holidays, and it can be quite daunting to be later faced with the aftermath of Christmas shopping and boxing day sales. This can often trigger the intention to be more financially savvy and save more money in the new year.
Whether it be telling yourself you will join a gym ‘again’ or aiming to dedicate more time to spend with loved ones, we as humans have a tendency to break our resolutions. With this being said, a small lapse in your savings plan doesn’t have to jeopardise your financial situation for the upcoming year. The good thing about having the desire to be money smart, is that there are always structures that can be incorporated along the way to aid in improving your money habits.
The focus of this blog is to provide you with some simple, yet effective tips to assist you in becoming more financially savvy in 2022.
Make A Savings Goal
When it comes to outlining a savings goal for yourself, it is highly recommended you set a goal that is realistic and within your reach. In doing so, you potentially avoid the situation of being tempted to give up on this particular goal all together and instead be able to enjoy the reward of what you’ve been saving for. This can provide you with a psychological boost that makes the benefits of saving more immediate, which in-turn reinforces the habit.
An adequate goal shouldn’t mean you have to sacrifice too much, it may just require you to restrain yourself at times in order to prevent you from living beyond your means.
Automate Your Savings
A quick fix that could present you with a better fighting chance to stick to your savings goal is to set up a savings account in addition to your everyday spending account. This would allow you to set up an automatic transfer of funds from your everyday account, into your savings account, at your desired frequency or time of month.
Overtime you are bound to become accustomed to a sizeable amount of money going straight into your savings and living off what remains in your everyday account.
Decide On an Adequate Savings Account
Although this may be regarded as common practice for some, there still tends to be people out there that have cash lying in bank accounts that are earning little to no interest. Although it remains important that you only trust your money with a reputable institution, after a quick search on Google, you are likely to be presented with various bank accounts that offer decent interest rates, possibly paying more than what you’re currently getting.
Set up a regular investment plan
For longer term savings goals, like a home deposit, consider setting up a regular investment. There are a number of options available that allow you to incrementally add to an investment savings plan, which can give you access to investments like the share market cost effectively.
For bigger goals like retirement, it will be worth speaking to a financial advisor, who will not only consider suitable investments, but also how you can help reduce tax and structure it considerate of your other plans.
Regular investing into a diversified portfolio will likely provide a better long-term return than other investments and by making regular contributions, you reduce your market timing risk, by distributing funds through the asset cycle.
Be A Savvy Shopper
Falling victim to instant gratification is one of the most common preventions of gaining control over your money. To avoid this, give yourself a few days to ponder before making a large expenditure, this can be an effective strategy to harness in order to keep your impulse buying in check.
In addition to utilising the concept of delayed gratification, it pays to be across the many different digital marketplace platforms when you’re in the market for a particular product. Sites such as Facebook Marketplace and Gumtree are great avenues that offer a variety of new and used products at great prices.
Cancel Any Unused Subscriptions
Plenty of people tend to forget just how many subscriptions they’re signed up to, which can land them in the situation of paying for services that aren’t being used, and overpaying for those that are in use.
If you’re looking to cull your subscriptions, a good place to start would be to cancel any services that you aren’t using at least a couple of times a month, you would be surprised how quickly even the smallest of subscription fees ad up.
Reflect And Often Reward Yourself
Track how your savings are going on a regular basis, and if you are off track reassess things, alter course and get back in control.
Find time to think about the ways in which you can save money, reflect upon the progress that’s been made and reward yourself when you are on track.
Ultimately, money is a vehicle that can help us afford things that make us happy. So, make it a positive driver and reward yourself and don’t let it be a constraint on your ability to live life!
Yield Financial Planning is Here to Help
If our savings tips have resonated with you and you think that you or someone you know may benefit from getting personalised financial planning advice, please feel free to contact us for confidential discussion with no obligations.