Five key areas to focus on to simplify your finances.

Managing your finances doesn’t have to be complicated. By focusing on a few key concepts, you can simplify and take control of your financial life. A new season is the perfect time to do this! Here are five areas to focus on: financial education, budgeting, credit health, debt, and savings

Simplify financial concepts by building your financial skills and knowledge.

By understanding financial concepts, you simplify them and empower yourself to make informed decisions.

  • Start with what’s trending – September marks the introduction of the Two-Pot retirement system. Do you understand this new retirement reform and its implications for you? Did you know this can potentially help you navigate a financial emergency? How much can you access? What would you use these funds for? Will this help you or hinder your financial progress?
  • Financial concepts and terminology can be confusing – reach out to a financial coach for a straightforward explanation of the Two-Pot system and other financial terms and concepts.

Simplify your financial blueprint by putting everything down in a budget:

A budget gives you a one-stop snapshot of what you have available to spend, how you spend it, and an opportunity to consciously address the shortfalls or redirect the excess.

  • List all sources of income, including salary, commission, freelance work, or investments.
  • Track your expenses using a free budgeting app or basic spreadsheet. Categorise items into essentials (e.g., rent, utilities) and non-essentials (e.g., dining out).
  • Set spending limits for each category and ensure total expenses don’t exceed income.
  • Live within your means. Cut unnecessary expenses and avoid impulse purchases.

Simple tips to simplify credit health:

Your credit score affects your ability to access healthy debt at a good rate; it’s key to maintaining a positive financial outlook.

  • Pay bills on time, as late payments can hurt your credit score. Set up automatic payments or reminders.
  • If your credit score is low, chat to a financial coach to develop a plan to improve it.
  • A good credit score means better loan rates, and it shows credit providers you are reliable with money.
  • Check your credit report for errors and report any inaccuracies. You can get a free credit report from TransUnion, Experian, or ClearScore.

Simple tips to simplify debt:

Debt can complicate financial wellness. Handling debt effectively is crucial for financial well-being. The average person spends around 75% of their income on debt.

  • Take a “selfie” or a snapshot of your debt. Write down all your debt, listing who you owe, the type of loan, the monthly commitment, and interest rate.
  • Work out your debt-to-income ratio – what you are spending on your debt as a percentage of your income.
  • Speak to a financial coach to explore strategies to simplify, manage and reduce debt.

Simple tips for saving:

Saving is key to financial security. A golden rule is to “save before you spend” and work towards an “in case of emergency” fund to cover unexpected costs like medical bills or car repairs.

  • Automate savings by setting up automatic transfers from your checking account to your savings account.
  • To stay on track, make sure you choose savings goals that motivate you.

Simplifying your finances does not have to be overwhelming. By focusing on these key areas, you can simplify and improve your financial life. Start small, stay consistent, and watch your financial health improve. This spring, take the first step towards simplifying your finances and enjoy the peace of mind it brings.

Reach out for financial coaching for more tips on how to work towards financial wellness.

Financial coaching is free, confidential, and accessible for you and your family.

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