February can be such a relief for families – and not just because children are back-at-school! The stretch between December and January can be hard as bills mount-up and there are holiday expenses.
For many, the aftermath of Christmas, presents, New Year festivities and holiday activity is overspending on credit cards and having to pay off incurred debt for the next half year.
New Cashfirst research revealed the main reason over 39% of its customers applied for a loan was to access additional financial assistance in ‘paying bills’.
“We’ve found an increasing trend where many of our customers are citing ‘bills’ as the main reason for accessing our loan services.” said Cashfirst General Manager Richard Shepherd.
“February and March is a great time to get back on financial track and put New Year’s savings resolutions into action,” said Shepherd.
“Think of it as taking the first steps to getting financially fit and healthy. By putting a simple but achievable savings strategy, or a ‘financial diet’, into place at the start of the year; you can overcome debt and lose that financial weight.”
Here are seven tips from Cashfirst to help better manage your finances in 2014
1. Start a financial diary
“When trying to lose weight, many dieticians suggest keeping a food diary. The same works for your finances. Keeping a financial diary is a great way of tracking daily, weekly and monthly expenditures; and to forward plan financially,” said Shepherd. “By keeping a financial diary, annual items such as car registration and third party insurance payments won’t be such a surprise. It is a great first step in helping you budget and balance your finances.”
2. To lose financial weight, set a savings goal
“When trying to lose financial weight, it is important to not only have goals to aim for, but to also be honest and take stock of where you are. Nothing will change if you stick your head in the sand.” said Shepherd,
“Calculate how much you have available after monthly expenditures and pick a savings goal which is achievable over the course of one year. If you’re committed, you will be amazed how quickly even the smallest of contributions builds towards your savings goal.”
3. Be prepared to make real changes to your financial lifestyle – there is no such thing as a quick fix
“Unless you change your spending habits, you will always be caught in the vicious cycle of balancing available cash against a growing tide of debt.” warned Shepherd, “It is important to realise that there is no quick fix; but rather, it is about incorporating healthier spending and saving habits into your everyday life.”
4. Keep an eye out for hidden saving opportunities
“Just like keeping your eye out for hidden calories, look out for hidden saving opportunities.” said Shepherd, “Think about what you regularly spend money on and ask yourself ‘Do I really need that?’ If you could save just $15 a week, that’s almost $800 a year!”
5. Cut credit cards out and add more cash into your financial diet
“You could liken using credit cards to pay when you’re short on cash to overeating, and in most circumstances, you end up regretting it.” joked Shepherd, “Incorporating more cash into your financial diet is a great way of making you aware of how you are spending day to day. Try withdrawing a set amount of cash for the week and living within that limit. You may be quite surprised with the results!”
6. Consider what financial diet works best for your lifestyle
“The financial expenditure of a household with children and one main source of income will differ greatly to one of a double or single income and no children, and again to retirees. It is important to identify the priorities for your financial lifestyle and to research what options are available to you.” Shepherd pointed out, “What works for one person may not be appropriate for another.”
7. Pick up the phone
“One of the most important steps in making a real difference to your financial situation is to talk to someone. There are a number of people and resources available to help you move forward into a more financially secure and stable future.” said Shepherd, “Cashfirst is committed to being a helping hand up, not down. We pride ourselves on providing credit solutions and setting realistic repayment plans which work within our customer’s budgets. As well as talking to your bank or financial lender, you can also access free financial counseling from your local community centre or council, or call the free ASIC MoneySmart financial counseling hotline on 1800 007 007.”