Many Australians do not consult financial planners because of preconceived misconceptions they hold about advisers.…
At the end of a busy year many take the time to reflect on the past and prepare for the future. Whether it be exercising, traveling, or improving your financial health, the start of a new year is a wonderful time to reset and refocus on the financial road ahead.
When it comes to financial health, many people have just spent hundreds of dollars on gifts for the holidays and may have spent more than intended. On the other hand, you may have done well sticking to your budget and want to ensure your success continues into the New Year. Here are a few ideas to consider when focusing on your financial health for 2019.
Easily one of the most cash flow constricting aspects of people’s finances is debt. The most common forms of consumer debt include credit cards, car loans, and payment plans for electrical items. Financial companies have done a fantastic job making spending painless and that benefits them greatly. However, it’s not great for the consumers bottom line. Eliminating debt will not only allow you to save more, but it allows your investments to grow without being bogged down by high interest debt.
“Some people are just stuck in their ways and have been brainwashed into believing that credit cards and debt are an unavoidable part of life”. – Dave Ramsey
For tips on how to reduce your debt read out debt reduction guide. It details effective ways of eliminating debt. Once you begin making small victories in your financial health, you will see life is better without debt and your financial road will be easier to travel.
In 2019 take the opportunity to organise your finances. One of the leading causes of financial distress is spending without a plan. For example, you’ve had a long day at work and don’t want to cook so instead you swing by a fast food establishment and purchase dinner. Doing this one time is no big deal, but odds are this happens several times a week and those costs can begin adding up.
“The budget is not just a collection of numbers, but an expression of our values and aspirations.” – Jacob Lew
An effective way to increase your financial awareness is to create a budget. It allows you to tell your money where to go and spend with a purpose. A budget doesn’t stop your spending, rather it focuses your spending. A budget helps you ascertain your shortfalls and where you can eliminate wasteful spending. On the macro scale, you want to ensure you plan your purchases of large ticket items, not buy on a whim. Write list of big expenses you will have in the year. Think about:
- Are you taking any holidays?
- Do you need a new fridge or electrical appliance?
- Do you have a home repair that needs completing?
- Are you having a medical procedure in 2019, etc?
Include any of these big purchases in your budget. Also include a line item for savings for an emergency fund so you are prepared for any bumps in the road. Having your financial plan in place for the year can help alleviate unnecessary stress and allow you to enjoy life more.
Lastly, it is important to invest time and energy into yourself in 2019.
“There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self.” – Ernest Hemingway
Finances are certainly an important aspect of life, but you shouldn’t stop there. Ensuring you continue to keep up your financial health, physical health, mental health, and relationships are equally important. An easy way to do this is to expand your horizons and introduce either something new or increase your exposure to something you already do. Read more books, attend conferences or self-help seminars, volunteer, travel, take the road less travelled or meditate. However you choose to invest in yourself make 2019 the year to give back to yourself.
All these facets of your financial life will benefit, and it all starts with you. No one’s perfect and we all have our shortfalls, but with self-awareness you’ll be able to put the right pieces in place to ensure you have the best chance at success.
For 2019, look at your financial situation and begin exercising your financial powers. Start by having an emergency fund in place so you can begin tackling your debts without worry. From there, ensure you have a financial plan in place for both the short and long term. A financial plan includes a way to purchase big-ticket items as well as having a budget in place every month to track your spending. Lastly, ensure you are taking time to invest in yourself because without self-investment, you’ll remain in a similar position you are now.
Make 2019 a wonderful financial year! It’s never too late to start and change your financial health. All it takes is one step at a time and you’ll begin to see the results.
The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of licensee’s position, and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author. Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.