Feeling overwhelmed by the family finances? Fear not - here are some simple ways to makeover your money and give your budget a boost.
Trim the fat
Forget about dropping a dress size! This year aim to trim the fat from your day-to-day spending. The easiest way to do this is to have a written budget. Drawing one up will tell you how much money is coming in, how much money is going out and, most importantly, where it’s all going. Be warned: the amount you spend in areas such as groceries, gifts, clothing and general entertainment could give you a bit of a shock!
We’re great at shopping around for some things, but when it comes to big costs, such as life insurance, car insurance and bank fees, we can often have a ‘set and forget’ mentality. It’s worth taking stock and switching things up for the better where you can, though. For example, a 2010 Choice report found that an adult couple could save $625 a year on average by shopping around for their car insurance. So review those costs! For comparing car, health and life insurance online, try iSelect, and for bank fees, Rate City is a good place to get started.
Stop flashing the plastic
The amount of credit cards we have, the number of times we use them and the debt we don’t pay off each month is ever increasing. So why not try a credit card detox? There are some great online calculators to help you work out an achievable repayment plan, too. Try the Australian Securities and Investments Commission's MoneySmart as a start.
Make a will
If you don’t already have one, make getting a will a priority. As well as making known what you want to happen with your finances and property, a will is the way in which you nominate guardians for your kids, just in case anything happens to you.
Having a will and power of attorney set can save time, money and a great deal of stress for your family. Ask around to find a good estate planning specialist, and surf the NSW Trustee and Guardian website for some great general information.
Attack the mortgage
If you have a mortgage, then all those wonderful savings that you can make following the above tips can be put to excellent use making extra repayments. Have you ever calculated how much you could save by paying extra onto your mortgage? As an example, making minimum repayments on a $300,000 mortgage at eight per cent interest over thirty years will end up costing you a total of $792,000. Paying an extra $200 per month will cut your loan term by over seven years and save you around $146,000 in interest costs. The Government’s Understanding Money has some great mortgage calculators to use – simply plug in your situation and see how much you could save!