Financial new years resolutions

Charmaine Wong, Yahoo!7 Moneyhound January 1, 2013, 9:00 am

Whether you make them, break them or scoff at the thought of them – it’s time for that New Year’s resolution.

Many Australians will be making resolutions for the new year, and financial resolutions will be amongst them.

While it can be easy to give up on that resolution before February comes around, it is possible to achieve your New Year’s resolution.

Here are the most popular financial New Year’s resolutions and tips to accomplish them.

I will get out of debt

Australians owe more than $38 billion in credit card debt alone. The total amount Australians owe is even larger if you add personal loans, mortgages and student loans to this amount.

If you aim for 2013 is to get out of debt, try to pay more than the minimum requirement. This will help you pay off your debt faster and also result in you handing over less interest to your lender.

If you have multiple debts, identify which debt you would like to pay off first. Government website MoneySmart advises paying off the largest debt owing first so you pay less interest. However, successfully getting rid of the smallest debt first can give you the confidence to tackle the remaining amount owing.

Related: Beginner’s guide to an investment property

I will save money

If your goal for the next year is to finally save enough money for that new house, car, or holiday, it can be time to start a savings plan.

A high-interest savings account can help you achieve your goal by offering a higher interest rate than an everyday bank account. While it can be convenient to open a high-interest savings account with your current bank, it can pay off to compare savings accounts to find one that suits your savings goal.

For example, some accounts with a higher interest rate may also have limits on a minimum deposit each month and your withdrawals. These restrictions can be an incentive to help you achieve your savings goal.

Be sure to check for high introductory rates as well as the default rate after this honeymoon period to choose the best savings account.

A savings plan that includes a direct debit can be a good idea if you have difficulty committing to regularly placing money away into your savings.

Related: 6 ways to make extra cash

I will get organised

Organising your finances could make a large difference to your wallet and your peace of mind.

Creating a budget could be a way to help manage your financial commitments. Map out essentials such as mortgage repayments, bills, and travel expenses, then begin to set a limit to other items such as entertainment or eating out.

If you are the type of person who wonders where all their money went from their last paycheck, it could be useful to track your spending before creating a budget. Keep a diary of the money you spend day to day and the means by which you make these purchases.

For example, you may find that you are paying extra for the convenience of making most of your purchases on a high-interest credit card. By switching to a credit card with a lower interest rate, you could be left with more money in your pocket.

A Financial New Year’s resolution can be a great start to a financially successful 2013.

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