Happy couple agreeing on financial solution Happy couple agreeing on financial solution
Happy couple agreeing on financial solution

The start of a new year is a great time to set yourself some goals. Even people who have had bad credit deserve to achieve their financial dreams. Though not as fun as some standard resolutions like finally going skydiving, setting yourself financial goals can give you the freedom and security to make the most of your year.

Your goals are your own and everyone will have their own priorities. If you want to feel more secure financially, get yourself out of debt or take control of your money, then here are five goals that you can set yourself this new year.

Create a personal budget and stick to it

Regardless of your income, it’s easy to find yourself struggling financially if you don’t manage your money well. One of the best things you can do for your finances is to create a personal budget and stick to it. It may seem intimidating or tedious, but once you get your budget set up, maintaining it becomes easier. And it can be the first step in achieving financial control and freedom in your life.

At its simplest, a budget is a record of all your income and expenses. It lets you know how much you’re spending, what you’re spending it on and how the money you spend works against your income.

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The first step in making a personal budget is to add up all the income you expect to receive in a month. Make sure to include all sources of income: your salary, side hustles, stocks, government assistance or any other way that you receive money. Once you have your monthly income, add up all of your monthly expenses. Some of these will be regular payments, like rent, a mortgage, or even a Ume Loans repayment. Others will change month to month, like groceries. Once you’ve got them all noted, you simply subtract the expenses from your income.

While making your budget you might find that some of the things you spend your money on aren’t things you need. These are costs that you can cut if you want to save a little money.  Your personal budget can also be used to set and track your other financial goals like reducing expenses or saving money. If you’re struggling, financial planners and online tools can assist further.

Cut costs

Buying a coffee every day, ordering take away or subscribing to too many memberships are all expenses that can quickly add up. Cutting back on some of these can lead to surprising savings. If you’ve made yourself a personal budget, you might be surprised to see the results.

That’s not to say that you have to cut back on everything – it’s good to let yourself enjoy the things that make you happy.

Whether it’s big or small, setting yourself the goal to limit some of your spending can do wonders for your savings. One coffee a day can add up to more than $1,500 in a year but buying coffee grounds and making your morning cup at home can cost significantly less. Tips like these can contribute towards larger savings before you know it.

Pay off debt

Credit cards, home loans or even a Ume Loans debt can be paid off faster. Coming up with a plan to pay off your debt is a major step towards financial freedom. If you have a personal budget, you’ll have a good idea of how much you owe and who you owe it to. If you don’t have a personal budget to pay off your debts faster, then talk to one of our Account Managers here at Ume Loans who can help you structure a way to clear your debts sooner.

Debt Consolidation

Seeing the numbers can be daunting but breaking them down can make it more manageable. First, start by working out the order that you want to pay off your debts. One option is to start with the smallest amount and work your way to the largest. You could also begin with the highest interest rate and work down from there.

Your budget can help you identify what habits have been contributing to your debt and give you a good idea of what costs you can cut. Setting and sticking to a stricter budget each month can give you the extra money you need to tackle any debt. Another option is to pick up extra work or add to your income so that you can increase your payments and tackle your debt quickly.

Build your savings

Saving money is always a good idea. Everyone saves for different reasons – an emergency fund, that holiday you’ve always dreamed about, or buying a new car – but having money saved away provides peace of mind and financial security. Though it’s not necessary to have a target, it’s often easier to decide what it is you’re saving for. It gives you the extra motivation you need to stay on track.

Your saving goal might be to have three to six months of living expenses in an emergency fund, or to buy the electric car that you’ve been eyeing off. Whatever the goal, start with how much you need to save and then you can break it down and add it to your personal budget. Though everyone’s finances are different, many experts agree that saving 10% of your income is a good place to start.

Don’t be afraid to save more than that. Find out what works for you. If you’re consistent with your savings, you’ll be surprised how quickly it grows.

Improve your credit score

If you want to take out a mortgage or buy a new car with a loan, having a good credit score makes the whole process easier. Setting yourself the goal of improving your credit score can help save you money on interest rates and increase the likelihood of getting approved for loans in the future. Here at Ume Loans, we have options to help pay your loans off faster and improve your chances of a more competitive approval in the future.

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There are many ways that you can increase your credit score. The first step is to check what it currently is. When taking out a loan with Ume Loans, we provide you with a free reputable copy of your credit file. Alternatively, there are several credit score checking companies that can be found online. Once you know your credit score, check to see if it’s accurate. If anything listed on your credit report does not add up, be sure to investigate further. The Ume Loans Lending Team is always available to provide clarity if you have any questions.

Strangely, having no debt at all doesn’t guarantee a good credit score. What lenders look for is your ability to make prompt payments and manage debt. Getting a credit card and regularly paying it off, promptly paying bills (like phone and internet) and managing different debts can all increase your credit score. It’s all about consistency and responsible finances. As part of your application process with us, we discuss all aspects of your profile in detail to ensure you understand exactly where you stand when it comes to your finances.

Speak to the team today on (07)5443 3863, or apply online.

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