Start by sorting the good debts from the bad. Good debts are those which are helping you build long-term wealth, such as a home loan.
Take stock of your bad debts, such as credit card debt, personal loans, or car loans, looking at the amount you owe, the rate of interest, and any fees, youíre being charged on each.
It’s worth contacting your provider for any credit card debt or personal loans to see if you can re-negotiate the repayments or interest rate, and then prioritise your debts, trying to clear those which are costing you the most in interest and fees first.
You could also look to consolidate your debts into one loan, which can give you a clearer picture of what you owe and possibly save you money.
Step two is setting up a budget for yourself or your family.
If youíre sick of living week to week or often find you have more month left at the end of your money, 2018 could be the year to take control of your finances.
A budget can give you visibility over the money you have coming in and whatís going out.
Once your budget is in place, you can set yourself some financial goals.
A goal with a deeply personal incentive will be more achievable than a new year financial resolution you pick because it seems like the 'right' thing to do.
If your debts are under control and you've built up some savings, this could be the year to think about investing to get your money working harder for you and make a plan for your future or your retirement.
With the excitement of the New Year, you may be tempted to make extreme changes to your lifestyle. Donít set yourself up for failure by trying to alter your saving and spending habits drastically. Start small and take it step by step.
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.
If you decide to purchase or vary a financial product, your financial adviser, AMP Financial Planning Pty Ltd and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.