As we now approach the last quarter of 2023, it can present a time of reflection of how various costs that are in and out of our control have impacted our cash flow, as well as continue to plan for what will hopefully be a great summer season. 2023 has presented many challenges to us all in regard to impacts on our cash flow, from continue rising interest rates, utility costs increasing, petrol now on the rise again, and our weekly grocery shop now more expensive than ever. With 1.2 million households still to roll off their fixed rate mortgages by the middle of 2024 – some of these rates are still around 2%-2.5%, it means more pressure on those households when they revert to the current variable rates around 5.8%-6%. This is a big impact on those household to have to find $500/$800/$1000 per month more in the household budget just to meet their new minimum repayments.
Christmas is fast approaching, and we all enjoy being out in the sun, catching up with friends and family during the warmer months, as well as celebrating the start of a new year. This can also bring pressure on people to be perceived to always ‘give’ when in reality this may cause a lot of stress given the current economic climate.
A great tool many of my clients utilise to ‘health check’ their budget is the ASIC Money Smart budget spreadsheet. It is very granular and allows you to capture lots of large and small expenses to allow you to identify areas that you want to focus on or put the spotlight on areas where some overindulgences may have been occurring. Analysing your credit card expenses or bank account expenses to see how each budget category comes together can be a real eye opener. Many people don’t realise that they could be eating, drinking or wearing their next holiday/kids’ education/or Emergency reserves by the lifestyle habits that they have been accustomed too. Every dollar we earn should have a job to do, and that include fun and entertainment, not just bills and mortgages, but being able to identify where adjustments can be made to ensure your spending matches your goals is critical to a well-balanced financial position. With only a touch more than 3 months till the Christmas and New Years break, now is a great time to start planning out your cash flow and budgeting needs to enjoy a well-earned break and not stress too much about having a ‘credit card hangover’ to start the 2024 year.
Milestone Financial Services ABN 68 100 591 508 is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, Australian Financial Services Licensee and Australian Credit Licensee. This document 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. The examples used are illustrative only and are not an estimate of the investment returns you will receive or fees and costs you will incur. If you decide to purchase or vary a financial product, your financial adviser, Milestone Financial Services 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 on (02) 6102 4333.
