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Five ways to be smarter with money this year

Five ways to be smarter with money this year

Less than one quarter of Australian adults feel they are well prepared to handle financial matters, research shows. While almost 80 percent think it’s important not to become a financial burden on loved ones – and who needs that kind of stress?

Don’t let another year go by without sorting out your money. Here are five simple ways to make 2013 count.

1. Track your expenses

You may be able to list most of the big-ticket expenses in your life such as your home loan payments, rent and bills. But often it’s the smaller sums of money you spend every week that can bring the most “yikes, I can no idea” moments when you begin to track expenses.

Track spending using one of the many free money tracking apps for smart phone, such as the federal government’s TrackMySpend app. Or do it the old fashioned way and gather all of your bank statements, credit card bills, utility bills and insurance premiums and plug them into a budget planner.

2. Set a savings goal

Identify some realistic savings goals and write them down. Ask yourself what is your top priority? How much will it cost? And when do you hope to achieve it? Now think about ways you can save money to put towards your goal. Look at your budget and see where you could cut back on optional extras like entertainment costs, shopping or dining out.

Use a savings account calculator, such as the one at RateCity, to work out how long it will take to save for your goal. Whatever your circumstances, by working out your goals and starting a regular savings plan, you can begin to make your dreams become a reality.

3. Spend your own money

If you’re tempted to spend more than you earn, a debit card might be a better option than a credit card for you as it only uses money from your account.  If you’ve got a credit card debt, treat it as a priority and pay more than the minimum repayment – increasing the amount you repay from 2 percent to 4 percent could save you thousands of dollars in interest, according to RateCity.

4. Give yourself a financial health check

One of the easiest ways to free up some extra money each month is to pay less – that is, less interest on your home loan, car loan or credit card, as well as fewer fees and charges on your accounts.

By comparing financial products using a site like RateCity and refinancing to a more suitable option for your circumstances you could save yourself hundreds, if not thousands, of dollars. RateCity found that credit card holders could save up to $380 by switching, while comparing home loans could save borrowers up to $1500 each year. Then take that money and put it straight back into paying down debt.

5. Insure your best asset

If you’ve ever had a car accident, a flight cancelled, injured yourself or been robbed, you’ll know how stressful these incidents can be. If you have insurance the cost of repairs, medical bills and travel changes can be softened. But with so many providers offering different types of insurance, it’s important to compare options, consider more than simply the cost and read the fine print to find a policy that suits your needs.

And finally, when building security don’t forget to protect your greatest money-earning asset – you!

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