The beginning of the year can feel like the time to start afresh and reset priorities.
This often takes the form of a new morning routine or gym membership, but it might be the season to put the lemon water down and devote some of your energy and good intentions towards your personal finances.
Behavioural economist Meg Elkins says it helps to approach resetting your finances with “steadiness rather than in terms of big ambitious goals”.
An associate professor in the School of Economics, Finance and Marketing at RMIT in Naarm/Melbourne, Dr Elkins says our tendency to be overambitious is a common pitfall and "when we fall short, we beat ourselves up".
It can be tempting to go big, but there are smaller ways to get a handle on your spending and feel less overwhelmed.
Start with awareness
Angel Zhong — a professor of finance at RMIT University in Naarm/Melbourne — says to "start with awareness instead of restricting your spending".
Professor Zhong recommends checking a weeks’ worth of spending without judgement; "you just want to start to notice patterns".
She says when we look at our spending, the motivation to change our habits can rise without the kind of "budget panic that makes people quit".
Both teaching and budgeting work best "when people begin with curiosity rather than punishment", Professor Zhong says.
Dr Elkins says being aware of what you're spending, and monitoring for the changes you want to see, can help people feel more in control.
Helpfully, many banking apps and websites will now filter transactions into categories to show you what you're spending on, she says.
Consider a budget
Professor Zhong says having a budget means you know how much you earn, spend and owe.
It is essential to understanding how much you can afford and will help with planning ahead for big expenses such as holidays, she says.
While it can feel intimidating, Professor Zhong says a budget is easier to put together after you’ve looked into your spending habits and made use of some of the analysis tools likely to be available within banking apps.
Associate Professor in finance and financial planning Bomikazi Zeka says an unrealistic budget is going to be restrictive and unsustainable.
Dr Zeka, who works at the University of Canberra on the lands of the Ngunnawal people, says she encourages people to be "realistic and pragmatic, but to also put a budget [together] that supports their lifestyle, wellness and productivity".
Some people download a spreadsheet template, others prefer to physically write things into a budget book or you can also use generative AI tools to create a template or structure with prompts, Dr Zeka says.
"There are many ways to budget, it's just a matter of finding what works with your lifestyle."
Check on your subscriptions
The beginning of the year is a good time to do an annual subscription check, Professor Zhong says.
It's easy to forget about individual subscriptions and $10 a month might not look like much, but can add up to a lot, "especially if you subscribe to multiple streaming services”.
We tend to underestimate these kind of "slow and repeated losses", she says.
"Review all your subscriptions and see if they are still needed, chances are you find out that some of them are no longer needed."
If you're feeling more ambitious, you could check you have a competitive rate or deal on bigger expenses such as your energy provider and mortgage rate.
Professor Zhong says there are often better deals for new customers in these sectors.
Use what you already have access to
If financial matters feel hard to get your head around, Dr Zeka says, "don’t beat yourself up because the system is confusing".
She recommends looking at the services and resources you already have as a starting point.
For example, she says many people have access to a complimentary consultation with a financial adviser through their super provider.
"That's something you can access just to touch base on, not just the short-term financial planning, but long-term financial planning."
Dr Zeka says we're often so preoccupied with short-term budgeting that we forget about our super and checking in on how it’s performing — by yourself or with a professional — is "a great way to kick off the year".
You could also check if you're happy with your mortgage and potentially "shop around and compare interest rates", she says.
"It's just a matter of taking inventory of what you already have and seeing how you can leverage that."
Like Dr Elkins and Professor Zhong, Dr Zeka recommends making the most of what your banking app has to offer.
"That could make getting started on a budget or looking at what you're spending a bit easier than having to track everything on a spreadsheet."
Try swapping out some fiction for some finance
Feeding your financial curiosity with some credible information is also something Professor Zhong would encourage those with the time to do.
If you need reading material maybe try something that will help with your financial education, she says.
Improved financial literacy improves you chances of making more informed decisions.
"There are a lot of free and publicly available resources online to improve your financial literacy … [such as] Moneysmart."
If you want to be better informed, Dr Zeka says speaking to professionals — whether a professional financial advisor, tax consultant or tax accountant — can also be very helpful.
"It helps when you can speak to someone and you can have that conversation and they can answer your questions and you walk away feeling empowered."
She says some of these professionals offer complimentary introductory meetings or chats and she says there’s nothing to stop you from reaching out to quite a few before finding the right match.
This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.
