The ‘No Debt Project’
- Written by Modern Australian
With the frenzy of the festive season behind us, the new year announces the realities of bills to pay and budgets to balance. There is no better time than the beginning of a new year to make healthy financial resolutions and reap the rewards of a healthier bank account. Comparison website Mozo has done the legwork and consolidated the best and most rewarding changes you can start incorporating into your daily life to help manage your money and knock out unwanted debt.
Take a snapshot of your finances
Mapping out your expenses and listing them in order of priority is the first step to taking back control of your finances. Non-negotiable essentials such as weekly groceries and utility bills should be at the top of your list. Review your list and see if there is any unnecessary spending or subscriptions you no longer use or need. Listing your debts is a crucial element as writing these down will help you make sense of the best way to tackle them.
Make a plan to knock out your debt
With a bit of planning and some discipline, you will be able to see motivational changes in your bank account over time. With the average Australian owing over $4000 in credit card debt, owing money can be ‘just a fact of life’ for many. You may consider taking out a balance transfer which can be a useful way to save on interest repayments by transferring your current credit card debt to another card at a lower rate. Another option is to consolidate your debt and move it into a low-interest personal loan, with a payment plan. Whatever you decide to do, gaining a snapshot of your financial situation - both good and bad, is the first step to getting debt free and financially fit.
Evaluate your spending
Look at your spending priorities and perhaps consider where you could make savings. This could be as simple as switching your branded household items to non-branded products. Reevaluating spontaneous spending, such as splurging on the latest pair of designer shoes, is also a surefire way of helping you save. The changes you make don’t have to be categorically life-changing but they will help you save big in the long-run. Every little bit helps and your saving discipline will develop into your new favourite habit.
Spend within your means
After having established a written plan, it is time to set a budget and stick to it. Money saving apps can help you in this process by keeping track of your incoming and outgoing funds. There are apps out there for everyone and every type of spender, and many banks are now offering inbuilt budgeting or money tracking features, to help you understand where your money is going.
Maybe even save a little…
The more debt you keep knocking off, the closer you are to being able to do more than squirrel small amounts away into the coin jar. If you have kept on track of making the minimum repayments on your credit card and combined that with healthier spending habits, you may find yourself in a position to start saving. According to the latest Mozo research, you could save up to $30,000 this year by making small changes, for example swapping your take-away latte for coffee at home or cancelling your gym membership in favour of exercising for free with your friends in the park.
For more money saving tips, head to mozo.com.au
