How to get (and stay) financially fit this year

After a chaotic few months, there has never been a better time to assess your finances and become financially fit. Assessing and reorganising your finances can be an intimidating prospect, but it doesn’t have to be. Check out our 6 tips for getting and staying financially fit:

1. Check your interest rate

If you haven’t compared your home loan interest rate lately, it might be time to do so. Interest rates are so low at the moment and chances are, you can find a better one out there. A lower interest rate can save you tens of thousands of dollars over your loan term, so there’s no reason to spend more than you have to. Refinancing is always an option.

Lendi partners with over 35 lenders to make sure that you are getting the best interest rate for your circumstances. Check out our rates here.

2. Make an emergency fund

This year has proven that life can be unpredictable, so it’s important to be prepared for any obstacles it throws at you. By putting a little bit of money aside with every payslip, you are protecting yourself in case any unexpected costs arise. Whether you need urgent car repairs, or need to get your wisdom teeth removed, an emergency fund can help alleviate any stress.

If you put $50 from your fortnightly paycheck into an emergency fund, you’ll have $1,300 saved within a year. Most internet banking apps will even allow you to automate your transfers into your emergency fund account, meaning you can sit back and relax while your fund grows.

3. Consolidate your debt to streamline your finances

Debt consolidation involves combining all debt into your home loan, allowing you to make one monthly payment. For example, if you have a credit card, a car loan and a home loan, you can merge these into one payment under your home loan. Home loans typically have lower interest rates than other loan types or credit products, meaning you can pay less in interest.

Another benefit of debt consolidation is that you can better organise your finances and not have to stress about accidentally missing payments because you have four different forms of debt to worry about.

To be eligible for a debt consolidation loan, you generally need to have a healthy credit score, stable employment history and a history of consistent, on-time home loan repayments.

4. Assess your financial commitments

Now is also the time to evaluate your spending and regular financial commitments. If you have any subscriptions or memberships that you aren’t using regularly enough, consider making some changes.

5. Set some financial goals

Goal setting is a great way to keep yourself accountable for your financial situation. Consider what is realistic for your situation and set short, mid and long term goals. You could:

• Create a savings goal to save, for example, $5000 by the end of the year
• Start your investment journey
• Create or update your will

Sometimes your goals can be quite ambitious and you don’t know where to start, so you might benefit from speaking to a financial advisor. Financial advisors seek to understand your situation and help you make your goals a reality.

6. Learn to live within (or below) your means

When we receive pay rises, or large unexpected sums of money, it can be tempting to feel the need to upwardly adjust our lifestyle and spending habits to ‘match’ this new income. Or sometimes pressure from colleagues, friends and family members can make you spend more than you can or feel comfortable with.

If you are serious about getting financially fit, try to avoid giving in to temptation and living well within your means. Alongside your financial goals, it’s a good idea to create a realistic budget that you feel confident in sticking to. The Australian Government’s Money Smart has a great budget planner that can get you started.

• Related: How to spring clean your finances

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The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.