On the first day of Christmas, my true love gave to me … some really handy tips for making sure your stocking is full this Christmas, and so are your pockets!
1. Have a budget and stick to it
Christmas is a time for spending, and eating too much. So how can you enjoy the indulgence, without feeling the financial pinch?
One suggestion is to budget.
Work out what you can afford to spend on Christmas. This involves calculating your income, detracting your regular expenses, and assessing your disposable income. Here’s a handy budget planner to get you started.
2. Set up an emergency fund
Naturally, we hope you won’t need to use your emergency fund. But having a buffer zone means you have peace of mind this Christmas. Put aside X amount of money, and know that it’s there for emergencies only, like medical bills, or one-off car expenses.
3. Set yourself short-term and long-term goals
Goal setting helps us stay focused. Because short-term goals are more in our line of sight, they are often more achievable than long-term goals. A short-term goal might be a holiday, or a bit of extra spending money at Christmas. Maybe it’s paying off a credit card or shop card. Long-term goals might be buying your first home, or car. Discuss your goals with your family, and write them down to stay accountable.
4. Have a retirement plan
It might be a long way off, or maybe around the corner. But having a retirement plan means you are looking after future you. Ensure your superannuation is serving you well. Maximise government and employer incentives. It’s worth booking a date with your tax adviser to make sure you have a suitable retirement plan in place.
5. Review subscriptions
The end of year is a good time to cleanse any old subscriptions you’ve been automatically paying for. Whether they are apps on your phone, membership subscriptions, or entertainment subscriptions, assess whether the subscription is still serving you. If not, be done with it.
6. Save automatically
Redirecting a specified amount of money from your income into savings will serve you well, even if it’s only $20 a week. $20 per week is $1,040 a year. It all adds up! Discuss with your Snartline Adviser whether an offset account is a good solution for you.
7. Restructure your loan
When was the last time you reviewed your loan? Now could be a good time to sit down with your Smartline Adviser, and chat about your options. If you restructure your loan, you could be looking at paying lower interest, which means there’s more in your pocket for later.
8. Pay off debts
It’s always a good idea to pay off debts. When you have a debt, you pay interest, so the quicker you can reduce the debt, the better.
9. Follow the 24-hour rule
To avoid impulse purchases, apply the 24-hour rule. Don’t purchase on the spot. Come back a day later if you are 100% sure this is the item for you.
10. Calculate hours worked
Consider calculating the cost of an item in terms of hours worked. For example, a $200 jacket might cost you 10 hours of work. This can help you avoid impulse purchases you don’t need.
11. Get financially literate
12. Get advice
Talk to people who know. Book a chat with your accountant, and your Smartline Adviser to access the support you need to make good financial decisions, and plan for the future this Christmas.
Wishing you and your family a happy Christmas!