The new year is the perfect opportunity to set financial goals for 2022. We've rounded up the top tips to get your finances in order for the year ahead.
No one likes entering the new year trailed by a debt, but in some cases it is unavoidable. If you can’t ditch the debt, try consolidating it. Consolidating a debt involves paying off multiple debts with a new loan or balance transfer credit card. You can do this with credit cards, personal loans or even store cards.
Doing so simplifies your repayments into one place, it can reduce the number of fees you’re paying on separate balances, and it’ll usually set you on a lower interest rate. You can compare your loan options here.
Set A Budget
A look back on your year of spending can set a good baseline to establish a budget for 2022. It may seem confronting but it’s a great chance to identify areas for improvement or adjustments in the year ahead.
It’ll also highlight how realistic your savings ability is. From here you can set savings targets to progress towards your financial resolutions.
If you aren’t sure where to start, try working with the 50/20/30 rule popularised by Senator Elizabeth Warren. The rule suggests allocating 50% of your income to essentials, 20% to savings, and the remaining 30% allocated to non-essential ‘wants’.
Pay Down Credit Cards
Credit cards are an essential aspect of daily life for many Australians. But what’s not essential is the looming debt that can carry. As you head into the new year, try and establish a plan to pay down your credit cards. Determine how much you can realistically afford to pay off and how often.
Where possible, avoid charging additional purchases on those cards while you’re trying to pay down what you owe.
We suggest taking a look into the interest rates on each of your outstanding credit card debts.
If you find yourself facing high-interest credit card balances, consider whether it would be more beneficial to pay those off or consolidate your debts under a lower interest, balance transfer credit card.
Revaluate Your Insurance
Shopping around for insurance isn’t the most thrilling way to enter the new year, but it can be rewarding. For most of us, insurance is a ‘set and forget’ financial decision. However, this attitude can end up costing you more in what is know as ‘loyalty tax’. Plus, you could miss out on new competitive deals that enter the marketplace. This applies to health insurance, life insurance, home and contents insurance – you name it.
The new years acts as a good prompt to take a look at alternative insurance options in the marketplace. Fortunately Compare and Connect have the tools to make doing so simple. Give your finances the best shot in the new year by comparing your options here.