Three easy financial habits to keep your 2020 goals on track

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By Michael Mears
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10 February 2020, 2:05 PM

How are your new year’s resolutions going? Apparently, up to 90% of new year’s resolutions fail, so don’t be too hard on yourself if yours fall into that bucket.

It’s not too late to make 2020 the year you get on top of the financial habits you’ve been meaning to implement. Here are our top three tips to help you create a financially healthier life!

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Tip #1: Where does all the money go?

This may seem unpalatable at first, but do you know how much you spend eating out every month? I significantly underestimated this in my budget until I started tracking my spending.

Whether you’re paying off debt or saving for retirement, tracking your spending is an easy way to take control of your money. It will also aid you in creating and sticking to your budget.

There are many apps out there, some of which link directly to your bank account and do the heavy lifting for you. I like to use Goodbudget, which utilises the good old envelope method. 

Tip #2: Plan to reward yourself

When saving for a significant goal (such as buying a house, going on holiday or renovating your kitchen) the reward can seem an eternity away and, to our own detriment, we get distracted by smaller rewards around us that offer instant gratification (such as coffee, eating out or new technology).

To help you achieve your goal, create a new bank account and call it “Holiday to Thailand” (or whatever your goal is). Every time you’re tempted to purchase that coffee, order takeaway or buy that new jacket, instead, take out your phone and transfer the equivalent amount to your “Holiday in Thailand” account and watch the number grow!

Tip #3: Avoid buyer's remorse

If spontaneous purchases are your Achilles heel, set yourself these two rules:

  1. Don’t make impulse purchases over $50, instead wait 24 hours before parting with your money. You may well change your mind! 
  2. Take your credit card out of your wallet and store it in the house. Doing so will give you the space you need to make a thoughtful (rather than impulsive) decision.

Bonus Tip

If you want these goals to stick, we can highly recommend the book Atomic Habits by James Clear who is an expert in habit formation.

If you are looking for help with reviewing or achieving your financial goals for 2020 and beyond, we’d love to hear from you.

Find out more

Michael Mears is a Financial Planner at Morgans Port Macquarie. Michael brings more than a decade of global finance experience combined with a simple and practical approach to financial planning that empowers his clients to achieve their goals and desired lifestyle.

If you would like to gain more control over your finances in 2020, you can you can contact the Morgans Port Macquarie office on [email protected] or via (02) 6583 1735.

General Advice warning: This article is made without consideration of any specific client’s investment objectives, financial situation or needs. It is recommended that any persons who wish to act upon this report consult with their investment adviser before doing so. Morgans does not accept any liability for the results of any actions taken or not taken on the basis of information in this report, or for any negligent misstatements, errors or omissions.

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