Finances can be quite overwhelming, especially in this ever-changing financial climate we currently find ourselves in. To make things easier, our team at SCCU compiled a list with 10 easy-to-follow steps you can take to help future-proof your finances.
1 – Budget like a boss and track your spending
Life can be unpredictable. One minute we think we have it all under control, then something pops up and suddenly we are struggling. Having clarity on your financial situation, including the little daily spends, can make the difference between building wealth and going into financial hardship.
Creating a realistic budget all starts with knowing where your money is going.
Whether you are a total beginner or a budgeting guru, tracking your spending patterns is a great way to make you stay on course. Using an app, spreadsheets, or online budgeting software to break down every single transaction by categories will help you understand how you are spending your money on a daily, weekly, and monthly basis and can provide you with a clear picture of your weekly living expenses. It will give you the information you need to plan your next financial moves and stop you dipping into your savings.
2 – Set goals – and stick to them
Money is just one way to help us live a better lifestyle and make our dreams come true. So, make sure you are clear about your why when creating your budget and don’t be afraid to set both ambitious and small goals.
Are you saving for a house, wanting to take a holiday, starting your own business, or just wanting that new pair of sneakers? No matter how big or small they are, having a clear goal will keep you motivated to stick to your budget, find new avenues to increase your income and make the most out of your savings.
You can also make this process a lot easier when using our new mobile app to manage your finances and set your savings goals – all at your fingertips!
If you haven’t downloaded yours yet, go through the Google or Apple store in your mobile, search for SCCU or Southern Cross Credit Union and click in install to start using it straight away.
3 – Maximise your savings
Did you know you lose interest when you withdraw money from your savings account?
If you already did the hardest part – which is saving up, now it is time to make the most out of it by not moving your money and letting it earn interest for you. When budgeting, make sure you include a buffer for quick emergencies to avoid dipping into your savings.
Don’t have any goals set for the next 6 months? Why not start now? Make your money work for you generating even higher rates when using a Term Deposit account and locking that money away for a term that suits your needs. Term Deposit usually earn a higher interest rate compared to an on call saving account.
4 – Consolidate the little debts
While personal loans and credit cards are good for short-term uses, you should consider paying down small debts to ensure you are not straining your budget. Or, consolidate a collection of small debts into one easy-to-manage payment with our fixed rate Personal Loan. We generally find that by doing this you reduce your monthly commitment and are able to put what you we originally paying into your savings account.
5 – Getting a loan? Prepare for interest rate fluctuations
Interest rates are bound to fluctuate over time, so an excellent way of preparing for the eventuality of rate rises is to work out what your repayments would be if they were to increase.
SCCU’s Home Loan Repayment Calculator is a great tool which can help you determine what your repayments would be on a higher rate. Apart from this one, we have other calculators you can use to plan for different scenarios such as when doing extra repayment and lump sum repayments.
If you know the loan amount you are requiring, try saving that amount each month and see how you go.
6 – Choose a loan style that works for you
If you feel confident with your financial situation and the current economy, you could consider a variable rate loan. Currently they are cheaper than fixed rates. However, if you like a bit of certainty, a fixed rate loan could be a good option for you. This will provide you with the peace of mind that even if rates go up, your repayments will remain the same until the end of the fixed term and you know what you will be paying each month.
Alternatively, you could get the best of both worlds with a split loan – part fixed, part variable. Splitting your loan gives you flexibility to repay a certain amount of your loan quicker, while keeping a portion of it fixed to ensure your repayments don’t increase during the fixed rate period.
7 – Take advantage of our Fixed Rate Lock feature
Got your application for your new home approved? Lock in that fixed rate and start celebrating!
Fixed Rate Lock feature is a home loan feature that can guarantee the fixed interest rate for the term chosen for a period of 90 days to protect you against rate rises between the time we process your Fixed Rate Lock request and the date of your loan funding. This way you can celebrate your new purchase while waiting for settlement knowing you will not have any last-minute rate increase surprises.
8 – Link an Offset account
Our transaction account has an offset feature which is linked to your home loan. The balance of your transaction account offsets the balance of your loan and helps reduce the interest accumulated. Using your Easy Access account to offset your Home Loan can be a great way to save money on interest payments.
9 – Get ahead with your repayments if you can
Being prepared is essential for future money management. If you are on a fixed rate, it is important to prepare for higher interest rates when your term expires and rolls to a variable interest rate, for example.
Setting yourself up now by making frequent loan repayments and paying more than the minimum requirement, will not only pay your loan off faster, but it will provide you with a bigger buffer when rates do rise. It’s also a great way to get ahead on your home loan in the meantime.
Just remember to talk with one of our home loan specialists prior to your rate expiring to talk through your options.
10 – Make well-informed decisions
The best way of future-proofing your financial position is by making well-informed decisions.
Apart from educating yourself using online tools such as our website and ASIC Moneysmart website, our team are here to support you and provide further information on any of our products and services that may assist you through your financial life stages. If looking for strategic guidance, licensed financial planners may be the way to go.
Do not hold back on doing your own research, asking questions, and getting all the information you need to support your financial decisions. The choices you make now can greatly impact your finances in the future.
Experiencing Financial Hardship
If you’re an existing customer who is currently experiencing financial hardship, or think you may fall behind on your repayments, reach out to us as early as possible. For more information about how SCCU can assist you, please visit our dedicated financial hardship page or head into one of our Financial Service Centres to talk to one of our team or call us on 1300 360 744.
Southern Cross Credit Union Ltd 82 087 650 682 AFSL 241000. Any advice is general advice only and does not take into account your objectives, financial position or needs (your ‘circumstances’).