Top 5 New Years Resolutions & how to WIN on 1.
With a new year kicking off we often feel the need to hit the reset button on our old habits and create some new ones. I personally think anytime is a good time to do this, and you don’t have to wait till the end of a calendar year. New Year’s resolutions can be very similar across the country – so much so INC completed a survey and found the 5 most common resolutions:
1.Diet or eat healthier
2.Exercise more
3.Lose weight
4.Save more and spend less
5.Learn a new skill or hobby
Sound familiar?
They also discovered that the one of the top 5 most failed resolutions was saving money.
This seems crazy, considering we believe it’s the easiest and quickest New Year’s resolution on the list! So, let’s start with where it goes wrong – 5 common places people waste money:
1.Dining and eating out: Nowadays, when it seems like there aren’t enough hours in the day, we rely heavily on convenience and are happy to pay for it. This is reflected in the way we eat, whether it be buying your lunch every day at work, picking up a snack from the servo on your way through or ordering some late night Uber Eats.
2.Neglected memberships and subscriptions: With the top 3 New Year’s resolutions relating to health and diet, it’s no wonder gym memberships around Australia spike by as much as 40% in January[1]. Often these will entail a 6 – 12-month contract, meaning if you don’t turn up to sweat it out as much as you planned to, you’ll be wasting money. Other subscriptions that people often don’t get their money’s worth from include music and television streaming services, magazine or newspaper subscriptions and product delivery services.
3.Shopping: Having just come out of the annual torrent of boxing day sales, it’s common for shoppers to spend a lot more than they realise grabbing anything and everything at seemingly ridiculously low prices. A lot of money is also wasted buying name brand products that could be easily substituted with a no-brand product for a quarter of the price.
4.Grocery shopping when you’re hungry: We’ve all experienced times when we’ve missed lunch and headed to the supermarket, only to find our trolley a fair bit heavier than it usually would be. In an article by Forbes the impact of shopping while hungry on your wallet is fully illustrated, with hungry shoppers spending 64% more on food items than shoppers with a full stomach.
5.Credit card or ‘bad’ debt interest: Spending above your means using a credit card and having to pay interest on the balance is a huge and unfortunately common money waster. Similarly, taking on ‘bad’ debt (when the interest repayments are not tax-deductible) is a sure-fire way to get yourself into financial trouble.
Do any of the 5 points above relate to you?
Now we have identified possible spending problem areas, lets fix the leaking money tap and save more! Here are 6 smart ways to save some cash for goals such as repaying debt, your first home or taking that long-awaited overseas holiday:
1.Reduce the amount you spend on dining and eating out. This could mean preparing your meals for the week on a Sunday so they are ready to go, taking advantage of restaurant deals or coupons on your mobile or going to BYO restaurants to save on drinks.
2.Cancelling unused memberships and subscriptions that are automatically charged to your bank or credit card. Looking at the past couple of months of transactions will often remind you of subscriptions you forgot you had!
3.Reducing your shopping by learning to distinguish between needs and wants. You could simply write out a list of this things you want and prioritise by if it’s a need or a want. This doesn’t mean you can’t treat yourself, but it will allow you to factor in those items to your budget.
4.Meal planning and creating a shopping list are sure-fire ways to save on your grocery bill. By planning ahead, you can buy your groceries in bulk as well, which will save you more than you think – even more if you can order it online and avoid temptations at the supermarket!
5.Don’t rely on credit cards for emergencies or use them to shop with – it can be a hidden trap for some. It allows you to spend more than what you earn. If you rack a credit card debt over Christmas like many other Australians – with an average debt of $1727 per credit card, then you have to pay back every cent plus interest if you don’t pay it back within the interest free period. Everyday debit cards are a better option for those of us who are likely to overspend regularly.
6.Increase your income, or generate extra money. Increasing your income will produce more money and if you maintain the same expenses as your old income you will save more. This may be in the form of promotions, more training or education to enhance your skills, change of job or even a side hustle. If that’s not an option, there are almost always unused items around your home you could sell on eBay, Gumtree or Facebook.
If you are finding it all too hard and need help specific to your situation then book a financial health check with James now.
7Wealth Pty Ltd ABN 44 609 210 246, is an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 Australian Financial Services Licence 232706 and Australian Credit Licence 232706
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/ or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.
