January marks a fresh start. It’s time to reflect and refocus so you’re set up for a successful year.
1. Take a Financial Snapshot
The first step is understanding where you are now. Take a look at your income, expenses, debts, and savings to create a clear picture of your current financial position. Review your bank statements, pay slips, and credit card bills to get a comprehensive view.
This process might feel overwhelming, but it’s essential. Knowing your starting point gives you a solid foundation to plan your next steps.
Action Tip: Dedicate one evening to review your finances, and jot down key numbers like your total debt, monthly expenses, and current savings balance.
2. Tidy up your Expenses
Now, it’s time to clean up your spending. Identify any unnecessary or wasteful expenses, like subscriptions you no longer use or impulse purchases that don’t align with your priorities.
Cutting these costs isn’t about depriving yourself; it’s about creating more room in your Spending Plan for the things that truly matter.
Action Tip: Set aside 30 minutes to go through your monthly expenses and cancel anything that doesn’t add value to your life.
3. Create a Spending Plan
A Spending Plan (or budget) is your blueprint for managing money intentionally. Allocate your income to essentials, savings, debt repayment, and discretionary spending. This plan ensures every dollar has a job and helps you stay focused.
Action Tip: Use the free Budget Planner at MoneySmart.gov.au to create your plan and track progress weekly.
4. Set clear Goals
Define what you want to achieve this year. Whether it’s building an emergency fund, paying off a credit card, or saving for a family holiday, having specific goals gives you purpose.
Break your goals into smaller, manageable steps to avoid feeling overwhelmed. Remember, progress happens one step at a time.
Action Tip: Write down one financial goal you’d like to achieve by June and list three actions you can take to get started.
5. Check on long-term plans
Your financial reset isn’t just about the short term. It’s also an opportunity to ensure your long-term plans are on track. Review your superannuation, insurance policies, and mortgage interest rate to make sure they align with your goals.
This step is often overlooked, but it’s crucial for your future security.
Action Tip: Log into your superannuation account to review your contributions and investment options.
A financial reset is not a sprint; it’s a journey. You don’t need to tackle everything at once. Take it one step at a time. Each small action builds momentum and brings you closer to your financial goals.
2025 is your chance to take charge of your money, one step at a time. You’ve got this!
Be the Boss of Your Money.
