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3 money tips to boost your finances in 2020

Sebastian Bowen
Investing tips

As we are now in February, it’s safe to say that 2020 and the new decade is well and truly underway. Although personal mottos like ‘new year, new me’ are somewhat clichéd, I still think the dawn of a new revolution around the sun is a good time to head back to the financial drawing board and re-evaluate whether your current financial plan is congruous with you and your family’s income and spending habits.

In that light, here are three tips that I think would benefit anyone wanting to get financially ahead in 2020 and beyond.

Re-think credit

The availability of credit is one of the leading causes of financial strife, in my opinion. Using credit cards, personal loans and newer ways to spend other people’s money like Afterpay Ltd (ASX: APT) is one of the biggest obstacles to ordinary people building extraordinary wealth in my view.

As we’re still (relatively) fresh out of the often-profligate Christmas season, it’s probably a good time to assess how you and your family use credit. If you’re paying interest on your cards by not paying balances off in full, I think it’s a warning sign that perhaps having the not-so-fantastic plastic isn’t the right fit for your family.

So, if you fall into this camp, consider what your credit cards are really costing you and whether you’d be better off with (at least) one less card in your wallet.

A penny saved is a penny earned

Talking of clichés, this one’s a doozy. But it is so because it rings as true in 2020 as it did in 1920. Our budgets these days are swamped with ‘recurring payments’ like Netflix, Spotify and perhaps Apple News or the new Disney Plus. Although these services seem cheap, these costs add up very quickly, regardless of how often you use them.

Think about it, Netflix isn’t a US$160 billion company for nothing.

So in 2020, it might be a good idea to run your ruler through the cash leaving your account every month. Remember, saving $500 per month is the equivalent to getting a $6,000 per year pay rise.

Invest

I might be a little biased on this one, but with interest rates at record lows, your cash really isn’t doing a whole lot in the bank these days (and is likely losing real value from inflation). Most of us are already investing through our superannuation funds, but why not up your contributions or start a small portfolio outside super, even if it’s just a simple index fund like the iShares Core S&P/ASX 200 Fund (ASX: IOZ).

Your future self will thank you, that I promise!

The post 3 money tips to boost your finances in 2020 appeared first on Motley Fool Australia.

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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020