With the year coming to a close, and festive season celebrations on the agenda, December can be a surprisingly good time to get your finances in shape. After all, now’s your chance to reflect on the past 12 months, make fresh plans, and get firmly on track before the shopping mania takes over.
The good news is, it doesn’t have to be time-consuming or complex. In less than an hour, you can take a few practical steps to make some positive changes to your financial situation. Set your timer and let’s go!
Exercise 1. Build a budget
If you’ve had a busy year, you may not have kept close track of your spending. A few dollars for your daily coffee might seem like no big deal, but you might be surprised to see how it adds up – and by December you might be wondering where all the money has gone!
Fortunately, there’s a simple solution: set yourself a budget using the ASIC MoneySmart budget planner. This tool will help you build a picture of your financial situation in just ten minutes, and it will even prompt you to factor in some things you may not have thought of (tolls, parking tickets, birthday gifts…the list goes on). If you need a nudge in the savings department, our everyday round up might be worth a look – it’s a great way to save on a routine basis without having to think twice.
Exercise 2. Start an emergency fund
It’s always a good idea to have some money to fall back on in case of emergency – the tricky part can be finding the motivation to save for a hypothetical scenario! One easy way to ‘feed’ your emergency fund is to include it as part of your budget. If you plan to set aside a certain amount each week or month, saving isn’t so hard – especially if you transfer it via direct debit into a high interest savings account (hint hint, ING’s Savings Maximiser).
How much you want to keep in your emergency fund is up to you, although the ASIC MoneySmart site states “As a guide, aim to save up enough money to cover your expenses for 1- 3 months.” This can be a huge relief if you happen to be made redundant or have unexpected health problems.
Exercise 3. Check your direct debits
Setting up direct debits can make it easy for you to pay bills on time, but if you ‘set and forget’ for too long then you could find yourself paying for services you no longer need. Do you watch all the channels on your platinum TV package? Still need that gym subscription if you haven’t actually set foot inside the place for months?
Take 10 minutes to do a quick scan of your direct debits over the past six months and see if there are opportunities to cut out or cut back. If you’re not actually using something, it really isn’t worth paying for it.
Exercise 4. Bring your super together
Around this time of year, many super funds send out their annual statements. Rather than file it in the ‘later’ drawer, take this opportunity to actually have a good look at your progress. How are things looking – are you on track for your retirement goals, or falling behind?
If it looks like things are lagging, there are a few things you can do. Firstly, consider consolidating all your super into one account – after all, the more funds you have, the more fees you could be paying, and these can put a big dent in your balance.
These days it’s really easy to roll your super into one account if you’re an ING Living Super customer. Just log into online banking, select Superannuation > Rollover your Super. As well as saving you from paying unnecessary fees, having just one account will make your super way easier to manage.
Exercise 5. Compare your home and contents options
Insurance isn’t the most exciting topic, and chances are, not one you think about very often. It can pay to take a few minutes to review and update your home and contents insurance though, even if it’s just once a year. Different providers offer various discounts – whether it’s for being a long-term customer, paying upfront, or (in the case of ING customers) buying your policy online. With this in mind, why not check if you’re getting the best value possible – and if you’re still insured for the right amount? As your needs change, so will your insurance requirements, so it makes sense to keep this up to date. You can find more tips on home and contents right here.
Exercise 6. Run a home loan health check
Like insurance, home loans tend to be one of those things we don’t think much about – and similarly, it’s one area where you could potentially save. If you’ve had your loan for a while, your lifestyle might have changed (and the world around definitely has!) so it may be time to make some adjustments. That could mean accessing equity, or setting up an offset that you can easily understand and use. At ING we’re here to help answer any questions you may have – just call 1800 267 809 or drop by the ING Lounge at 60 Margaret Street, Sydney.
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