Getting on top of your finances is one of the most common new year’s resolutions.
However, research we conducted in October 2023 showed while 72% of 27- to 34-year-olds have a financial goal, 33% are not on track to achieve it.
The key to setting an effective goal is to be SMART - that is creating goals that are specific, measurable, achievable, relevant and time-bound. Vague goals such as “spend less” or “save more” don’t provide enough direction to set you up for success.
Here are five easy goals you can set to get your finances in shape this year.
Review your bank and credit card statements
Consider this your Spotify Wrapped for your finances. Before making any new financial goals for 2024, take stock of your spending for the past year. Like ripping off a band-aid, it might make you wince a bit but understanding where your money is going is the first step to setting up healthier spending habits.
Free up spending money via a budget
Budgeting might sound boring and restricting, but it is a tool to help you spend your money on the things you really want. Create a budget that aligns with your income and financial goals. Ensure you have covered things like insurance (e.g. car, health and home), rent or mortgage payments, and regular bills or repayments.
Pay off those pesky debts
If spending during the festive season left you with credit card debt now is the time to make a plan to pay it off. Break down what you owe into manageable chunks by prioritising what you can pay first. Use the snowball method to help you stay motivated to get out of debt - start small and pay off your debts one by one. This is great for paying off credit card or personal loan debt. If your debts feel more like an avalanche, you can consider financial counselling. Call the National Debt Helpline on 1800 007 007 or use their online chat function.
Get active with your savings
Developing a savings mindset will help you get ahead and avoid debt in 2024 and beyond. Savings can help cover you in case of an emergency and help you reach your bigger money goals, like buying a house or going on a holiday. Set up an automatic recurring payment to regularly transfer money into a high-interest savings account.
Build your financial knowledge
Our research also highlighted that 89% of 27- to 34-year-olds want to learn to be more confident in managing their finances. So this year, commit to learning more about money. It can be as simple as logging into your super account each month and checking your investments or subscribing to a newsletter or podcast.
However, not all financial advice is created equal. If searching online for financial information, seek out credible sources and be on the lookout for scams. The Moneysmart website is a free and trustworthy source of financial information, with tools such as a budget planner and savings goals calculator, as well as tips and tricks on everything from developing an investing plan to optimising your superannuation.
Let’s make this our best year yet – start with Moneysmart.