New Financial Year Tips Amid Rising Costs 

July 5th 2024 | Categories: Financial Planning |

Managing Your Finances in the New Financial Year Amid Rising Costs

As we navigate through a new financial year, many are grappling with the ongoing cost of living crisis. Rising inflation, increased energy prices, and escalating living costs have made financial planning more critical than ever. Here are some top financial reset tips to help you manage your finances effectively in these challenging times. 

Reevaluate Your Day-to-Day Budget  

Reviewing your budget is the first simple way to reset your finances. As cost of living pressures rise, it is more important to track where our money is going.  

Start small. Instead of trying to look at all your living costs at once, focus on one area at a time. This approach feels easier and gets you into the mindset to make more changes. For example, take note of your daily spending for a week. This can help you find quick ways to reduce your spending — at least for a while. Tracking your spending can highlight unnecessary expenses and help you create a more realistic budget. In many households, groceries and electricity bills are where rising costs are biting the most. Look for ways to reduce these and other costs. Simple adjustments, like planning meals and doing groceries online, buying on season produce, reducing energy consumption, and avoiding impulse purchases, can make a significant difference. 

Budgeting can seem like a daunting task. If you want some help to review your budget, or simply need a template to guide you on where to start, check out the Government Money Smart tool here: Budget planner

Review big-ticket expenses  

Identify and review your big-ticket expenses. This includes housing, insurance, and any significant monthly bills. Assess whether there are opportunities to save, such as refinancing your mortgage, switching insurance providers, or renegotiating contracts. These larger expenses often offer more significant opportunities for savings than smaller daily costs. 

Set yourself a financial challenge  

Challenges can be a fun way to reduce spending and test your ability to reduce costs, especially if your friends or family join in. You could set yourself a ‘low spend’ month, where you aim to only participate in free activities for a whole month and there are usually more free activities around than you may think. Checking out your local council website is a great place to start. Or, start having ‘fakeaway’ nights with your friends. Rather than heading out for dinner and drinks as you usually would, opt to stay in and cook to cut costs.  

Replenish your Emergency Fund 

An emergency fund is crucial in uncertain times. With elevated interest rates and budgets stretched to the max, it is easy to forget that unexpected expenses can pop up at any time. If you’ve had to dip into your savings recently, make it a priority to replenish your emergency fund. Aiming for about three months’ worth of your salary saved away will give you a buffer if you need a lump sum of cash. This can provide peace of mind and security against unexpected costs, such as medical incidents, emergency housing repairs or sudden job loss. 

Update Your Estate and Insurance Plans 

Review and update your estate plan and insurance policies. Ensure your will is current, and your beneficiaries are correctly listed. Reassess your life and health insurance to make sure you have adequate coverage at affordable premiums. This step is about protecting your assets and ensuring your loved ones are cared for in case of unforeseen events. A new financial year reset is the perfect time to review these details. 

Check your home loan rate 

With interest rates staying higher for longer than anticipated, it’s essential to stay on top of your home loan rate. Compare your current rate with the market offerings. If you find a better rate, consider refinancing. Even a small reduction in interest rates can lead to significant savings over the life of the loan. Compare your home loan here: Your Local Mortgage Brokers | Invest Blue Finance  

Review and Adjust Financial Goals 

The start of a new financial year is an excellent time to review and adjust your financial goals. Whether it’s saving for a house, planning for retirement, or building an investment portfolio, ensure your goals are still relevant and achievable. Adjust your strategies if necessary and set clear, attainable targets.  

Stay Informed and Seek Support 

Financial landscapes change rapidly. Stay informed about economic trends, government policies, and financial products. Knowledge is power, and staying updated can help you make informed decisions. Don’t hesitate to seek professional advice to ensure you are making the right decisions for your circumstances.  

The cost of living crisis presents significant challenges, but with careful planning and proactive measures, you can navigate these turbulent times. By reassessing your budget, building an emergency fund and managing debt, you can achieve financial stability and work towards a secure future. Stay informed, seek support, and remain adaptable to ensure your financial health in the new financial year. 

Want a Complimentary Consultation?

Fill in the form for a complimentary consultation with a Financial Adviser and start living your best possible life.

What you need to know: This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.