Simplify your finances in just 5 days

It’s almost the start of a new year, so here’s a challenge to kick things off and simplify your finances in 5 days (or less) before getting on the new year bandwagon.

If you don’t know where your money goes, are overwhelmed by debt or have no cash set aside for emergencies, there’s no time like the present to get your financial situation sorted out.

To help you on your way, we’ve created a five day challenge to get you started. All you need is to put aside an hour each day—and why not tell a friend or family member, or even better, get them involved?

After all, when you make yourself accountable, studies show you’re more likely to achieve your goals. So, if you’re keen, jump to the starting line—it’s time to get things underway.

Day 1 – Create a budget

Yes the B word..! Creating a budget can help you keep track of your money, cut down on unnecessary spending, reduce debt and save for various goals you might’ve set yourself.

Start by using a simple yet effective cash flow system: Watch the how to guide here

You’ll need to record

  • What you earn – wages, salary, other sources of income
  • What you owe – your debts, including credit cards and loans, plus any fees and interest charges you might be paying
  • What you spend – living expenses, including things like food, bills, transport, gifts and entertainment.

HACKING YOUR BUDGET (TIP): Use MoneyBrilliant to see exactly where your money has gone in the past 60 days.

Once you’ve crunched the numbers, you can then look at areas to make some savings. And, there are plenty of tools which can help, such as MoneyBrilliant.

Day 2 – Use online tools to make things simpler

There are a range of things you can now do online that can help simplify and streamline your financial life.

  • Set up direct debits so your bills are paid on time
  • Elect to receive communications electronically. This will help the environment, as well as your hip pocket, as some providers now charge for paper-based communications
  • Download apps like MoneyBrilliant, so you can access your finances on the move
  • Check and update your details, so your providers don’t lose track of you

Day 3 – Create your investment plan

Investing seems pretty daunting right? No need to fear investing, it’s actually quite simple when you break it down to simple steps. Follow these steps to get an investment blueprint and then contact a professional investment adviser to help you start building.

  1. Write down you investment goal. (i.e- to have $xx dollars invested in XX years)
  2. Determine how long you’re willing to invest for. Will you need access to your investments in 1-3 years, 3-5 years, or 5+ years time?
  3. Determine what kind of investor you are and what level of risk you’re willing to take. You can do this using AMP’s Investor Style calculator.

Day 4 – Compare your providers

List your current providers, for things like your home loan, bank accounts and credit cards, mobile phone, internet, gas and electricity. How much do they charge and what do you get for this?

Do your research and see what competitors are charging and offering in comparison. If you can quote a better deal, your current provider may offer you something better. Comparing providers can often end up saving you in the long run.

Day 5 – Explore your money goals and values

All the tasks above will get you underway to a better financial future, however without purpose driven and results focused financial goals, the probability that you’ll move back into the money habits from the past is high. In order to gain full clarity, control and confidence over your finances, setting clear financial goals, that are TRULY aligned with your personal values, is the only real way to ensure you stay on track (along with ongoing accountability)

Use AMP’s goal explorer to start exploring your goals and set yourself a timeline for these goals. Then get in contact with a financial adviser that you trust to help you implement your plan and keep you accountable for the long term.

Congratulations for taking on the challenge and good luck!