We’re a few weeks into the new year now – the new financial year that is – and it’s finally time for us to take our financial fitness as seriously as we take our Netflix marathons (god bless Bridgerton).
With a one-in-a-century pandemic (nearly) behind us, it’s time to pump the brakes on excessive UberEats orders, buying luxe home office furniture and of course, hoarding more toilet paper stock than one could ever use.
With that in mind, here are a few simple things you can do to get financially fit this financial year.
Automate your savings
We know, we know. Saving cash isn’t as fun as spending it. But a great way to make saving money as painless as possible is to automate it.
“Automate your savings” sounds fancy – but really all you need to do is set up a regular transfer from your transaction account into your savings account.
Make sure you set the transfer up on payday – that way you don’t get a chance to think about how much money you’re bringing in overall, and get tempted to spend it. Out of sight, out of mind.
Set a lil budget for financial fitness
Although budgeting can be painful (even more painful than taxes..), it will help you keep track of everything you’re spending… and it will highlight areas to cut down on (lookin’ at you 4th-pair-of-Nike-runners, random-oil-diffuser-from-Instagram and new-suitcase -we’ll-never-be-able-to-use).
A good rule of thumb is the 50/30/20 method: 50% of your after-tax income is for fixed expenses (rent or bills), 30% is for discretionary spending (clothes, nights out 🤪) and 20% is for your savings.
Check your credit score
Stats show that just 7% of Aussies actually know what their credit score is.
Credit scores are like your Uber rating – but for money. Generally, it’s a score between 0 and 1200, and it gives lenders an indication of how reliable you are going to be as a borrower.
Things like outstanding debts and late bill payments can affect your credit score, so the sooner you know what your score is, the sooner you can take action to clean it up.
You can check your credit score for free in seconds.
These three simple steps should take no longer than 10 minutes to improve your financial fitness – but could save you thousands in the new financial year.
Co-founder of Flux Finance, a podcast and media platform that helps guide over 200,000 Aussies with their financial literacy, Justin provides a unique perspective on millennial finance.