The beginning of the year is ideal for assessing your financial health and planning for the future. With inflation now surging to a 32-year high, rising interest rates and energy bills soaring, it’s time for Australians to start looking at their finances to ensure they have a plan for long-term financial success. With access to the right tools, you can invest intelligently, manage your debts, grow your superannuation and savings, and make sure your money works for you.
Consolidate your debts
The first step in gaining control of your finances is consolidating any outstanding debts into one simple payment. Consolidating your debt can help you save money in interest payments by merging multiple high-interest loans into one loan with a lower interest rate. This can also simplify managing debt payments by allowing you to make one payment each month instead of multiple payments on different days throughout the month. Consolidating debt can also improve your credit score and help you stay organised with all your financial obligations.
Create a financial safety net
Financial stability is a cornerstone of security but takes planning and preparation. Experts recommend having enough funds to cover at least three month's worth of monthly expenses--four times that for families with four or more members. As an estimate, this could mean upwards of $40,800 in savings just for the family unit; single persons should aim to save between $10-20K depending on their individual budget situation. While it won't happen overnight, taking steps towards establishing your financial buffer will bring peace of mind now and greater assurance into the future.
The average family needs help juggling the demands of working and saving. With Westpac estimating that only $3,500 is saved on average, things start to look worrying for those who want long-term financial stability. You can create an additional safety net to get through tough times with a few adjustments. Consider making extra mortgage payments or selling unwanted items at a garage sale. Consider cutting back on expenses by getting rid of that second car and renting out the space instead. Creating financial goals for yourself doesn't just help secure your future - it can also be fun.
Earn extra money with your side hustle
Another great way to gain control of your finances is by starting a side hustle. A side hustle is any job or activity earning extra income outside your "day job." It's a great way to generate additional income without having to take on more hours or commit more time than you can currently give. Side hustles can range from freelance writing or photography work, tutoring students online or selling products on sites like Etsy – there's an array of options available. Starting a side hustle can effectively pay down debts faster and free up some cash flow.
Consider micro-investing
Investing can be one of the ways to achieve your long-term financial goals. Blossom is an investment app for Australians who want to take control of their long-term financial success. Blossom gives people access to returns from fixed-income bonds, something up until now only the big end of town had access to. It’s quick and easy to sign up, and you can get started with $1, $5 or $10. The app provides savings tools like savings goals, round-ups and saving calculators to help you start your journey towards a secure future. As of January 2023, Blossom targets 5.95% p.a. (as at July 2024) returns to help you reach towards your savings goals faster.
The Blossom Fund is issued by Gleneagle Asset Management Limited. Please consider the PDS and the TMD before you apply. All information is general advice only. All investments carry risks.
Grow your super with extra contributions
You can also grow your super by making extra payments yourself. Even small amounts add up over time, and voluntary contributions can reduce the tax you pay. With Grow My Money, you can earn extra money towards your retirement just by shopping on the Grow My Money platform. You can shop online or in-store, and every purchase earns you cashback into your super account. It's as simple as signing up and doing all your shopping in one place. The Grow My Money platform is the simplest way to make extra contributions, with or without a job. It's free to join and has 1000+ participating brands, making adding extra cash to your super simple.
This year, don't just resolve to save money - resolve to get serious about investing, contributing to your super and planning for long-term success. By consolidating debts, building a side hustle and utilising apps like Blossom and Grow My Money, it's possible to gain control of your finances while still ensuring your money is working hard instead of sitting idly by. Get started today and see where investing and planning for a secure financial future could take you.
Disclaimer
This guide contains general information only and does not take into account your personal circumstances, financial situation or needs. Before making a financial decision, you should read the relevant Product Disclosure Statement and Target Market Determination of the specific financial product and consider whether the product is right for you and whether you should obtain advice from a financial adviser.