Well, it’s not as hard as it may seem, the outcome of your year is up to you. It all depends on what you put in. Like everything in life, the key is to plan, implement, review and adjust.. until you’ve hit your goal. Let’s expand on each of these..
Set your goals
For example, say we want to go overseas at the end of the year, but DON’T want to borrow any money. We have worked out the cost will be around $10,000 and we will have to adjust our budget accordingly.
This may seem daunting, however if we break this overall goal into smaller goals, the outcome seems much more attainable. This will include: keeping to a spending budget for the year, reducing costs as much as we can, and sacrificing what has to be sacrificed to achieve the goal. It is more complex than just setting one overall goal as you can see.
TIP: Book the trip, and pay it off over time.. commit yourself!
Plan
Planning is setting out a well thought out structure that will help you achieve your goals. Like everything in life, it’s the discipline that is the magic glue that keeps the plan on track.
Because your goal now has multiple smaller goals, you need to cater for those as well. But don’t worry, this is just the devil in the detail of achieving something meaningful.
Things we need to plan around:
- Travel itinerary and best value flights and accommodation.
- What areas of our budget are we going to tighten up on?
We are looking at freeing up approx $200 per week:
- How much can I save by refinancing my home loan? On average about $4k per annum. Some lenders are giving away $2k just to refinance – we are over halfway! (Total $6k thus far).
- Phone, electricity, gas.. easy to save around $150 per month just by switching plans or providers.
- Got a credit card? Switch to an interest free offer – on a $10k credit card balance this could save you up to $1,900 per annum in interest.
So far, we have managed to save $9,700 WITHOUT any reduction to our standard of living. Just by negotiating our main service providers, we can save close to $10k per annum!
Do you buy coffee every day? Don’t worry we’ll leave that one alone!
Now think of other expenses you incur that you can reduce.. lunches, dinners, clothes etc..
Taking action & implementing the plan
We like to say this is where the “rubber hits the road” and everything comes together. Talking to Ben at HTA Finance to get help with reducing the home loan repayments, and credit card providers would be a good first step.
Next would be researching some online utility suppliers such as:
Look at other phone providers as well.. can you BYO phone and save money there? The range of options are almost limitless, just remember to push for discounts the whole way. Remember $1 saved is worth $2 earned because the tax man can’t get their mitts on it!
Consistent reviewing
Now you have freed up substantial cash it is important it goes where it should and not on other items. Fortunately, the holiday is already booked so you should have a payment to make each month.
Adjust when required
Try not to adjust the goal itself (unless is has increased because of your efforts), but be mindful the path is not set in concrete and can change as required. Don’t be shy when asking for what you want when it comes to achieving your goals. They are extremely important.
May 2020 bring you immense happiness, health and wealth!
