July 1st marks the start of a new financial year in Australia, and just like the start of the calendar year it’s a great time to refresh and maybe set some resolutions.
I was inspired by the New Financial Year post by The Twenty Percent – using the UK’s April end of financial year as a second chance to revisit money goals and review the year. I like the idea of doing this at a different time to January, when all the other kinds of personal goal setting gets in the way.
Side note – I heard somewhere that the reason why different countries have different fiscal years is so that accountants could spread their workload. Does anyone know if this is true?
I’m already part-way through my money goal for 2021 (more on that in a later post), but here are some other ideas for financial new year resolutions:
Spend some time figuring out what your ideal financial future looks like – Knowing the ‘why’ behind your savings goals is a powerful motivator. Think about what your values are and how more financial freedom can help you make the most of them. This might involve retiring early, spending more on your hobby, setting up your own business or changing career. Take some time out to consider what you would do if money was no issue.
Make your savings goals SMART – Break your big ‘why’ into smaller steps (Specific), calculate the dollar figure you will need (Measurable), calculate whether or not it is going to be possible based on your earnings and basic expenses (Achievable), check what lifestyle changes you will need to make (Realistic), then put a date to it (Time bound). Even with really big visions like retirement, you can use tools like compound interest calculators to test some scenarios and set goals that you are more likely to achieve.
Set up an annual budget and map your savings goals – I’m a fan of the zero dollar budget because you assign amounts to each category, including savings, as soon as you get paid. Last year I spent some time setting up a budget for the entire year to help with those bulky costs like utility bills and annual insurance payments. Mapping expenditure over the entire year also meant that I could map savings over the entire year, and check how achievable they were. You can download the spreadsheet I use for my ultimate zero dollar budget here.
Do a sprint to fast-track your savings goals – Get off to the best start, or get things back on track by doing a short-term money saving sprint. Do a no-spend day or week, forgo a luxury like alcohol or clothes for a month, or challenge yourself to a budget holiday.
Find ways to automate – Look for ways to reduce any barriers to achieving your financial goals. Schedule reminders to pay bills and put money into savings. Find an easy way to track spending (I use the colorful budget app) and automate as much of your budget as possible with a spreadsheet.
Do you have any financial resolutions that you want to refresh?
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