Five simple ways to take an active role in your financial future. For those wanting to get serious about their personal finances this year and take control of their money, here are five simple ways to do it.

1. Get involved in your finances.

By simply taking action and getting involved, you will become aware of where your money is coming and going.  This will result in reduced spending.  Things like reading your bills properly – mobile phone bills, credit card bills and debit card statements, can all be a bit of a black hole of spending.  Read yours and find out where your money is really going.  Consider if there is any waste you can cut out.

2. Get rid of all your personal debt

By personal debt we mean debt created by credit cards or personal loans.  This is usually debt created to fund your lifestyle, and is unnecessary. In the short-term (until you can pay off your credit card debt) you can consider rolling all your credit card debt into one low-interest introductory card rate. Not only will you be paying a lower interest rate, but you will also be paying less bank fees and charges.  You will also get that feel good feeling as you watch the debt decrease before your eyes. For the long term control of your money the best move is to cut up the plastic if they are too tempting.  If you feel that you must hold on to a credit card for emergencies, or need it for work travel, reduce your credit limit.

3. Create a household budget

Managing your household budget goes a long way to taking control of your money.  Without cash slipping through your fingers you will have extra to put away.

Budgeting involves establishing all of your income and household expenses, and other fixed costs to determine where you can cut bank on spending.  When creating your budget this is also the perfect opportunity to review your spending habits and consider what strategies you can put in place to ensure you are not over-spending in the future.

4. Make small extra payments on your mortgage

Make extra payments on your mortgage as soon as your pay comes in.  You won’t miss what you have not seen. And particularly while mortgage interest rates are low, making as many extra payments as you can is really saving you money in the long term.

For example, you could push yourself to pay just an extra $50 per month (that’s only about $12.50 each week!) on a $300,000, 30 year, mortgage, calculating your savings at an interest rate of 7 percent, you will save yourself over three years and almost $38,000 in interest costs. Doubling those extra payments to $100 per month on the same mortgage will save about four years and almost $69,000 in interest.  Worth doing we say!

Also, assess your mortgage options.  Your home loan is the largest item on the budget, so make sure you are getting the best deal.  Compare your home loan with other bank and non-bank lenders, and don’t be afraid to ask for a better deal.

5. Start saving for a rainy day

Stay focused on your saving goal by setting regular and realistic saving targets. One way is to each month recalculate all your debt, and set a goal for how much you will reduced it by. A simple but effective saving technique is to set up a direct debit to funnel a percentage of your pay, for example $50, straight into your savings account.  If you don’t see the money, you can’t spend it.  Of course, for this tactic to be effective you should not link this savings account to your keycard!  This is a great saving technique for those without the discipline to save on their own.