Cost of living pressures have piled on over the last 12 months, and Australians can’t be blamed for entering the new year with a little bit of apprehension. While inflation appears to be ticking down and the pace of interest rate hikes has slowed, there’s still lots to be uncertain about.

If you’re worried about your finances or just want to improve your financial position in 2024, here are a few steps you can take that might help.

Be proactive with your mortgage

The Reserve Bank’s campaign to quash inflation has been felt by many mortgage holders, with interest rates rising by a staggering 4.25% since May 2022. But the good news is there are things you might be able to do to help ease the burden.

For starters, you might want to research the market to get a sense of what other lenders are offering. By doing so, you can see how your existing arrangement stacks up and potentially find one that’s more appropriate given your current circumstances.

And if you don’t have an offset account or you’re not contributing much to yours, this may be something you might want to consider looking into. Offset accounts function much like regular savings accounts, but instead of earning interest on your balance you save an equivalent amount on your mortgage. And unlike a savings account, that interest saved won’t attract any tax.

Be more thoughtful with your discretionary spending

Buy now pay later services, credit cards, and shopping websites boasting same day delivery have made it easier than ever to send money out the door. And for those of us trying to prioritise financial wellness in the new year, the ability to quickly satisfy every impulse to spend can be one of our biggest obstacles.

To help rein in these tendencies, think about reducing or avoiding credit card use and buy now pay later services. And whenever you get the urge to buy something extravagant, it might be useful to wait 24 hours before doing so. If you still want to purchase an item after a day’s deliberation, that might be a sign it’s worth the hit to your budget (but instead of purchasing it on credit, consider saving up for it).

Plan ahead to minimise surprises

Just like a business owner might, it can be helpful to think about potential risks and take steps to minimise their impact on your bottom line. This can take many forms including having a well-stocked emergency fund, making sure your investment portfolio is sufficiently diversified, and taking out personal insurance if you don’t already have a policy in place.

Understand your cash flow

Having a cash flow strategy will differ from keeping a budget, as budgets might be demoralising depending on how restrictive they are. Instead, the aim is to have a clear idea of where your money is going so any uncertainty and surprises are kept to a minimum.

Start by calculating the percentage of your income that goes towards meeting your expenses each month, but don’t forget to factor in those once-a-year expenses. Many people often neglect to plan for things like yearly car costs and have their budgets thrown off when they unexpectedly arrive.

Visualising the flow of your money can also help you identify areas where you can afford to be more frugal. Small changes like cancelling unused or excessive memberships can make a big difference over time, and you might choose to channel any cash you save towards your investment portfolio or paying down debt.

Find ways to increase your income

There are only so many ways you can rein in your spending, and chances are there are things that cost money that you don’t want to cut out of your life. To help take some of the pressure off your budget, it might be worth looking for ways to increase your income. Some things you might be able to do include:

• Renting out a spare room in your home
• Selling items you no longer need
• Negotiating a raise at your current job
• Looking for a higher paying job
• Taking on a side gig