As we work our way into another year, it’s a time that brings you the opportunity to get your finances in order. You might still be recovering from your festive spend — it happens to many of us and it’s so easy to do. Presents, holidays, house guests and perhaps back to school expenses all combine to drain the pocket dry.
So, where do you start? In previous articles I have mentioned that the first thing you need to understand is where your money goes. The easiest way to do this is to keep a budget — just a simple spreadsheet recording what you spend. The important part of a budget is to record everything that you spend, even the cup of coffee on the way to work. When you do that you have a true spend amount to work with.
Remember that keeping a budget does not mean that you cannot have a lifestyle; however, it will make you aware of whether your current lifestyle is affordable or not.
The second thing you can look at is reducing your debt. Many of us have several accounts and cards and shuffle money from one account to service another. In the short term this may be effective, but it is detrimental in the long term as the multiple lenders and services come with a host of different fees.
The old saying, “divide and conquer”, can be applied to your spending. Sending your money out to different sources weakens its power. When you have a base point or central repository for all your money it is strengthened and you can have every dollar you earn actually working for you.
The third point is not to get caught up in the hype of interest rates. They continually rise and fall and the lows and highs may not affect you as much as friends at your dinner table or barbecue tell you. It is easy to get swept along with the crowd, particularly when media outlets are plugging it as top news. Finance is not one size fits all, so working with professionals in the industry will help you to understand exactly what importance an interest rate has on your overall financial situation.
Even if you feel in control of your finances and your future plans, it is still a good idea to get them reviewed every couple of years. Laws and policies constantly change and if you are like any normal family, situations and events that need unplanned dollars frequently sneak out of left field to surprise you and keep you on your toes!
Last but not least, always ensure the professionals you ask are qualified experts. ☐

Financial strategist and mortgage broker at Richmond Residential, Angela Dye has been serving the Baulkham Hills community for over a decade. Richmond Residential,
Suite 415, 33 Lexington Drive, Bella Vista. Ph: 02 8824 4000.