The secret is motivation. Staying motivated can mean the difference between achieving your goals and failing. Everyone is motivated by different things. Below are some tools that may help you stay motivated. Think of them as "financial workouts" to help you get financially fit.
Watch your net worth grow. Your net worth is the difference between what you own and what you owe. It's a measure of your wealth. Watching your net worth grow over the months and years can be a great motivator. Sorted's
net worth calculator will help you calculate your net worth. Over the years, you can graph the changes in your wealth. Watching your position steadily improve will encourage you to keep going.
Take charge of your money - do a budget. Doing a budget shows you how much money is left over each month, after you've paid for essentials like food and rent. You can then decide how much of this spare money you want to save or spend, and on what. Each month, you can compare your actual spending and saving with your budget, to see how well you've done. Doing a budget makes it easier to keep track of your money. It helps you trim unnecessary expenses, and free up money for more important things. For help doing a budget visit
Sorted's budget calculator.
Set goals, and plan small steps to achieve them. You may have a big goal, like owning your own home in five years. But to get there you'll need a plan that includes a series of smaller goals. These smaller steps might include things like paying off a student loan, or saving $50 a week towards a deposit. Achieving these smaller goals will help keep you motivated, so you're more likely to reach your bigger goal. When you're setting your big and small goals, be specific and realistic.
Sorted's goal machine can help you do this.
Pay off your debts. As a rule, it makes good financial sense to pay back your loans as fast as possible before you start saving - particularly if you have high interest debt, like hire purchase or credit cards. This is because usually you pay more interest on a loan than the interest you earn on savings (after tax). Use
Sorted's loan repayment calculator as a quick way to see what the true cost of your debt is.
Watch your savings grow. Seeing how your savings can grow over the years can be very motivating. Sorted's
regular savings calculator and
lump sum calculator will show you how time, and the power of compound interest, can turn even small amounts into substantial sums over the years.
Imagine your retirement. Thinking about the lifestyle you want in retirement can also be motivating. Sorted's
quick retirement calculator shows how big a nest egg you'll need to support a particular lifestyle. It also shows how much you may get from New Zealand Superannuation and how much you must save each month to build that nest egg. Don't panic if the numbers look large. As our managing your
nest egg calculator shows, even a small amount of savings can have a noticeable impact on your income in retirement.
Getting financially fit can be hard work. But regular "financial workouts" like the ones outlined above will help keep you motivated to achieve your goals.
