How to: New Year’s Resolution

pjzc7lot2ig-hope-house-pressHow to: New Year’s Resolution

Isn’t the Christmas holiday season just the BEST! Balmy summer nights spent overindulging in food, wine, festivities and fun.
“Avocado is extra? Oh go on!”
“$20 cocktails!? Treat yoself!”

Yes, denial was lovely – we’ll give you a moment to reminisce.

NOW, snap back to reality and we’re out the other side. You’re back at work, trying to hide the Christmas kilos and scared to check your bank account, but determined to get real and commit to a resolution – new year new me!

“My New Year’s Resolution is to not spend ANY more money this year!”

Good on you! A great thought, now get rid of it.

Why? Because we’ve got a better idea, and it’s called Spending in Moderation.

Think back to your reckless spending over the festive break. Wasn’t it fantastic! Instant gratification and a carefree attitude – and you know what, that’s okay for a little while.

We’re not robots, and we NEED that element of gratification that the odd spate of reckless spending gives us. In fact, it’s totally normal and necessary if you’re ever going to save money – let us explain why.

sd2fxgkdagk-brigitte-tohmIf you think about your finances like a diet, it’s much easier to see that starving yourself of every dollar you earn, just like cutting out every fun food group from your diet, is the fast track to a binge and blowout. It simply doesn’t work in the long term.

A better way to spend (and to diet) is in moderation. Taking an 80:20 approach, you can be responsible with your money 80% of the time, and have some fun with the rest!

You’ll find that maintaining some fun spending will remove this binge cycle, and you’ll start saving more. Your happy level of spending will keep your instant gratification levels in check and that 80% for the big ‘life’ goals will start looking a lot healthier!

How to Spend in Moderation

Step 1:

Set some time aside and work out your 80:20 split, making sure you include in there your essential spending like rent, bills etc. This should be done with your partner, if you have one.
Note: Not sure what your essential spending should look like? Check out our spending plan on our website here.

Step 2:

Make a wish list – what are your goals this year, and next? What do you want to save for? If it’s a house – awesome, if it’s a holiday, that’s okay too! Just make a list of your priorities and make sure you’re saving according to what’s important to you.

Step 3:

Work out the maths – how much will it cost you to achieve your goals, how much can you save each month to get there, and how much can you afford to have fun with in your day-to-day.

Step 4:

Put a timeframe on it – based on your very detailed and exact maths (okay maybe a rough estimate) put in some dates for when you’re going to achieve these savings goals.

Step 5:

Keep your goals top of mind – reminding yourself of your goals every day is the best way to make sure you stick to them. Write them down, stick them on the fridge, and stay focused.

So, here it is, this year we challenge you to a New Year’s Resolution of Spending in Moderation!

And if you want to do it properly (you should… it’s time) a great way to get help creating your plan above is using our 6 Week Money Management Course.

It’s completely free via a weekly email, each activity is quick and easy to complete and will give you the key tools you need to work out your goals and the fastest way to achieve them!

Check it out here.

Oh, and Happy Happy New Year, here’s to a spectacular 2017!

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*Comparison rates are calculated on the basis of secured credit of $150,000 over a 25 year term. Please note this comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.