Four new year’s financial resolutions to kickstart 2021

Four new year’s financial resolutions to kickstart 2021

There are so many new year’s resolutions you could make going into 2021, but have you considered including financial resolutions? Sure, it’s not nearly as fun as promising to travel more or start a new hobby, but it can just as easily transform your life and create healthy habits for the future.

Whether you’re struggling with debt, scared to try new things or have kept your finances on autopilot up until now, here are four new year’s financial resolutions to kickstart your 2021.

1. Ditch credit card debt for good

If you’ve got a maxed-out credit card debt weighing on your shoulders, one of the best resolutions you can make is to commit to paying it off in 2021. Minimum repayments aren’t enough and can see your credit card debt snowball out of control. So, it’s time to set a plan into motion.

Look at your credit card debt and look at your budget, then sincerely answer the question of how much you could commit to putting on to your debt each week/fortnight/month for the next 12 months. Could you skip out on one subscription service to help this? Can you try doing free workouts off of YouTube as opposed to a class membership? Perhaps you have a few old things you could sell for extra cash? Sacrifices sometimes have to be made to get on top of debt.

You may also want to consider if a balance transfer credit card may suit your financial needs. As a standard credit card will continue to accrue interest on your outstanding balance, a balance transfer card with a zero per cent introductory offer may create some much-needed breathing room. You may be able to pay down your debt without adding more to it from pesky interest charges.

2. Dabble in fintech

Are your finances still sitting comfortably in analogue while your friends and family keep encouraging you to enter the digital world? This year could be the year you dabble in fintech (and we promise it’s not as scary as it seems).

Here are some of the easiest ways to step into the world of fintech without being overwhelmed:

  • Round-up savings tools. For every purchase you make, some apps will round this up to the nearest dollar (or more) and deposit this “spare change” into a savings account. Many institutions also offer this handy feature inbuilt into their savings accounts, you just need to switch it on. This includes ING, Up and Bank Australia.
  • Contactless payments. In this Covid-19 age, the need for contactless payments has increased in our daily lives, and digital wallets have been a lifesaver for this function. A digital wallet can be an app or platform on your phone or computer that works as your wallet by securely storing your card details. And thanks to digital wallets like Apple Pay and Samsung Pay, all you really need nowadays to make contactless purchases is a compatible smartphone.
  • Wearable technology. Speaking of contactless payments, ever wanted to make a purchase after a work-out or a beach swim, but realised you’ve not got your wallet on you? This is where wearable technologies come in. Using contactless payment technology, some wearables allow customers to tap-and-go for purchases using a raft of everyday items, including rings, watches, pins and gym towels.

3. Improve your credit score

Whether you’re looking to get a home loan or nab a credit card, or if you’ve never thought about your financial reputation before, 2021 could be the time you work on your credit score.

Credit score is a number attributed to you by a credit reporting agency based on your credit report. Your credit report is a detailed look at your credit history, meaning any credit products you’ve applied for, been rejected for or are currently using. It also may include any utilities bills you’re on and your current phone plan.

An excellent credit score means you’ll be more likely to be approved for financial products, as it showcases to banks that you’re a responsible customer. A poor credit score may mean that you’re more likely to be rejected for products due to issues in your past or even mistakes on your report.

Here are some ways you may be able to improve your credit score in 2021:

  • Check your credit report for errors
  • Don’t make multiple applications for financial products
  • Pay off your existing debts
  • Grow your savings
  • Avoid making late payments

4. Nab a lower home loan rate

While this resolution may not apply to everyone, 2021 may be a good year to consider grabbing a lower home loan rate. The home loan market is currently experiencing the lowest interest rates it’s had on record. Meaning, that if your home loan lender is charging you through the nose in interest, you’ve never had more bargaining power to nab a lower rate.

The first place to start is with your current lender. Find your current interest rate and then make a list of reasons why you’re an ideal borrower. This may include that you live in the property, own at least 20 per cent of the property, are employed full time or are paying principal and interest.

Then, hop online and take a look at what your current lender is offering new customers. Generally speaking, lenders will reserve their lowest interest rates for new customers to get them onto their books. Also, using comparison tables, take a look at what competitors are offering customers like you and keep a shortlist.

Now, pick up the phone and call your lender. Present all your research, including that you’re an ideal customer, you know your bank offers customers lower rates and that there are better deals out there. Finally, request that your lender lowers your rate.

If your lender won’t budge, drop the words “mortgage discharge form”. This can help to show that you’re serious and may encourage them to drop your rate to keep your business. If your lender still won’t lower your rate, you now have a shortlist of new lenders with more competitive rates that you could consider switching to.

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Learn more about bank accounts

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. You will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

How do I open a bank account if I'm under 18?

The good news for savvy young folks like you wanting to take charge of your finances is that there are many bank accounts available for under-18s.

For bank accounts that require you to be 18 or older, you’ll have to rope in a parent or guardian to open the account for you.

Otherwise, you can apply by yourself online or at the branch of the bank, credit union or building society that has the account you would like to open. 

If applying online, you might be asked for a form of identification. For under-18s, this could be a Medicare card you’re listed on, your birth certificate and/or your current home address.

In most cases, you can verify your identity online (at the time of applying) or at the branch afterwards.

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a branch

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

Can I link a bank account to Paypal?

Paypal is a safe and convenient way to pay online without the need to share your financial details. You can send and receive money or accept credit and debit cards as a seller using Paypal.

It’s easy to link your bank account to a Paypal account and start making transactions within minutes.

To start, you first need a Paypal account (it’s free to join). When setting up your Paypal account, you will be prompted to link a credit card or bank account (or both if you wish).

PayPal works without a balance; you can use Paypal to shop or send money when your balance is zero.

When your Paypal balance is zero, Paypal will ask you to choose your preferred payment method at the checkout.

This could be either your linked bank account or credit card. Your bank details can be updated if you change banks or credit cards.

How do you change your account name on NAB banking?

Changing the name on your NAB bank account is straightforward, as long as you have the right documents.

If you’ve just got married, divorced or legally changed your name, here’s what you need:

  • Married – a marriage certificate
  • Divorced –your ‘decree nisi’
  • Legal name change –your legal name change certificate

You can take either the original document, or a certified copy, into a NAB branch, where it needs to be sighted by a bank employee and a copy taken.

Your NAB bank account name will be updated immediately. New debit, ATM and credit cards with your updated name will also need to be issued. These usually take between five to 10 working days to be posted out to you. Your existing cards will keep working until you activate your new ones.

If you haven’t legally changed your name, but just want to change your account nicknames, you can log onto NAB and do it through the Settings/Mailbox menu.

How to transfer money to another bank account

Transferring money to another bank is often called a bank transfer, and it can be done a few different ways.

Customers generally need three pieces of information to transfer money to another bank account. Customers need the account name, BSB and account number of the account they wish to transfer money to.

One way of transferring money to another bank account is in a branch with the help of a staff member; they will often give you a receipt as well as confirmation of the transfer.

Transfers can be also made via internet banking and phone banking.

Some banks also allow customers to make transfers via partnered ATMs, especially if the account is with the same bank.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

How do you open a bank account under 18?

If you’re under 18 and you want to open an Australian bank account, you will need your passport or birth certificate. (Some lenders might require just a Medicare card or driver’s licence.) You can apply online or at a branch. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

Can the government take your money from your bank account?

There are some instances when the government can take money from your bank account. This generally occurs in situations where you have an outstanding government debt.

Before it can take money from your bank account, the government authority owed money would first need to issue a garnishee notice. 

A garnishee notice is issued by the government agency (such as Centrelink or the ATO) to a third party that holds money for you or owes you money.

To take money from your bank account, your bank would be issued with the garnishee notice requiring it to pay ‘your money’ to the requesting agency to satisfy the debt.

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

Which bank is best for business accounts?

Unfortunately, there’s no definitive answer to the question of which bank is best for business accounts. That’s because ‘best’ will differ from customer to customer, depending on their unique circumstances. These include not only your company’s financial position, but also its size, its age and the sector in which it operates. Another factor to consider is what features you want in a bank account. Your business may require different features than another business; and your business may require different features tomorrow than it does today.

The best thing to do is to thoroughly research the market before opening a business account. And when you do open an account, you should reassess your options every year or two, because the market moves quickly. A particular bank might offer the best account today, but be surpassed by one or several rivals tomorrow.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.