Achieve your Financial New Year's Resolutions
Sunday, February 8th, 2015
At the start of 2015, many of us made New Year’s resolutions. Commitments to improve health, personal development and finances are popular goals. But if you’re like most people, the good intentions only last a couple of months before eventually falling by the wayside.
With this in mind, we’ve compiled some useful tips to help keep your finances on track.
Set up a Budget
Although it may seem restrictive, drawing up a budget can actually be very revealing. Sorted is an online budgeting tool that is simple and easy to use. Just click on the following link and your ready to go.
The Money Planner enables you to see the difference between your income and expenditure. It allows you to enter expenses on a weekly, fortnightly or yearly basis. This will enable you to see if you have a surplus income or a shortfall and where you have to reduce your spending. After completing your planner, you can save it by creating a free account called “My Sorted.” Revising your planner on a regular basis will put you in a better position to prioritise spending and achieve financial goals.
Making a commitment to reduce debt is easier said than done. Credit cards are often the most common reason why people get into debt. If you are someone that relies on this method of payment, it is best to choose a card with the lowest rate of interest and pay it off ASAP. Rates on credit cards usually range from 12-20 %, so check with your bank and if possible switch to a card with a lower rate.
If you have a number of debts, then check out the Sorted Debt Calculator. This will show you how long it will take to pay off your credit card, hire purchase or personal loan and the amount of interest owed. Sorted also offers a useful Mortgage Repayment Calculator.
Start an Emergency Fund
In the event that you lose your job, incur expensive medical bills or have unexpected repairs, an emergency fund can help tide you through the difficult times. As a general rule, aim to have approximately 1-2 months of living expenses saved in a bank account. If possible, try reducing the money spent on food, clothing and entertainment. This can be channelled into a fund and will gradually build up over time.
Save for Retirement
Even though it might seem a long way off, saving for retirement is a very smart move. As everyone is different, it is important to consider your future lifestyle and expenses. This could include overseas travel, unexpected medical bills, and supporting dependents etc. With this in mind, Sorted has developed a Retirement Planner to help you work out how much you will need to save for your retirement depending on your desired lifestyle. This calculator allows you to include NZ Superannuation, KiwiSaver as well as your partner's savings. In New Zealand, Superannuation is available to all those who are legal residents, having lived here for a least ten years since the age of 20. For further information on Superannuation rates as of 1 April 2014, visit the Work and Income site.