3 Steps to a Healthy Financial New Year

Published on: January 29th, 2020

With 2020 upon us, many of us are thinking about our goals for the year ahead, and that should include your finances too. At this time of year, you’ll no doubt be inundated with advice on everything from health to career, but it’s simply not possible to change all your habits at once.

So, when it comes to your finances, we wanted to make our advice simple: Focus on one thing at a time and follow these three steps to live for today while planning for tomorrow in 2020.

  1. Set your goal and write it down

Choose an area of your finances that you want to focus on. It could be anything that will improve your financial position, from saving a little extra to building up your super or even starting on your investment journey.

Research shows that only 8% of us achieve our New Year’s Resolutions, and your chances of success may well be determined at the goal-setting stage. It’s important that your goal is clear, focused, and attainable. For example, saying “I want to save more money” is not enough, you need to break it down to a smaller, defined goal that you can achieve sooner, e.g., I want to save $1,000 extra in January.

It is critical that you write this goal down, and put it somewhere prominent, where you will see it all the time. It might sound simple, but a long-term study by Yale University showed that people who wrote their goals down significantly outperformed those who didn’t.

  1. Invest in yourself

Your future earning potential is likely to be your single biggest asset; a 45-year career at today’s average wage would see you bringing in around $3.7 million, and there are options to grow this figure if you are prepared to invest in yourself.

Take a look at job advertisements for roles at the next level to see what skills employers are after and work out what you need to do to build them. Often, your current employer will cover the cost of training in your field, so it may not cost you anything upfront, but can have a big impact on your career and your finances in the long term.

You may also want to invest in your financial knowledge. For example, if your goal is to build your superannuation, read all you can, talk to your super provider, and consider meeting with a financial planner to work out how you can make the most of your finances. The Apt Knowledge Centre, our hub for financial articles, calculators, and even education modules is a great place to start. You can request free access here.

  1. Make a plan and stick to it

The hardest part of any goal is sticking to it, and we know that come February, many of our New Year’s Resolutions have already fallen by the wayside. If you have followed step one and written your goal down, you’ve already made inroads, but there are a few other things you can do to keep yourself on track:

  • Set regular reminders. Put reminders in your phone that will pop up on your screen, focused on not just what you are trying to do, but also why you are doing it. If you are saving for a trip, for example, you might add a picture of your destination to the reminder.
  • Reward yourself along the way. It’s hard to stick to a goal, so set some regular rewards for yourself to keep momentum. It might be that once you have achieved a certain amount of savings, you’ll splurge a little on yourself. While this might seem counterproductive to your goal of saving, it will provide milestones to help keep you on track and motivate you to continue.
  • Tell someone close to you about your goal. Just like having a gym buddy can motivate you, having your partner or a friend across your goals can help to keep you accountable.

Building a healthy financial future will give you more freedom and help you get the most out of your money and your life. It does take a little planning and commitment, but it is possible, and it really will pay off in the end. If you are finding it hard to keep on track, consider talking to a financial adviser who can help you set objectives that will enable you to live for today while planning for tomorrow and give you the best chance of long-term success.

 

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.