“Anyone who isn’t embarrassed of who they were last year probably isn’t learning enough.”
Alain de Botton - British philospher, b. 1969
The above quote may seem a bit harsh … however the point being made is that there is always room for improvement!
The start of a new year is often the time we reflect and look back. It is often also the time we ask ourselves what we could improve on for the year ahead. One of the main themes that come up for most of us is how to be better with money.
Below are three money tips that can help kickstart your financial journey this 2019:
It’s a good time to ‘take a step back’ with the intent of understanding how much – and on what – we are spending money.
What may, on the face of it, seem like an affordable purchase can end up costing us a lot more down the track. For example, the latest smartphone, which can easily cost upwards of $1,000 is advertised to cost only $40-60 per month. This theme of "monthly payments" ring true for a number of other popular purchases such as Spotify, Netflix, and interest-free payments for retail items.
More often than not, it is these small, recurring payments that end up costing us a lot more than we think.
One way to keep track of how many recurring payments you currently have is by updating your Budget. This will show you how much money you are paying for these recurring payments as well as if you actually have a surplus at the end of the month once all of your other expenses are taken into consideration.
Another consideration is to check if there are cheaper alternatives to these monthly-paid services that you can afford to pay in full. Better yet, recall the last time you used one of these services and ask yourself if you can handle unsubscribing to some of them instead.
The basic principle of saving up money is something that has probably been taught to us at some point in our lives. However, life and all its hurdles and the expenses that go along with these can make it difficult to set aside money consistently.
Rather than ‘playing it by ear’ and seeing if it will be easier to save money this month than the last, a far more effective solution is to use a simple and personalised system that will do the work for you.
The bank plan is designed to do exactly that. This tool automatically organises the information and transactions you have placed into the your budget into a simple and effective bank account structure. When followed correctly, this system automatically transfers the money you need for transactions such as household expenses, pocket money, and savings into their respective accounts. This makes sure that you will always have a bit left over to grow your savings without restricting your lifestyle.
The availability of credit cards has made it easy to get into debt. On the other hand, getting out of debt can take months or years of financial sacrifice, self-discipline and pain.
If you are currently struggling with debt, the Short-term Debt Journey is a great way to start getting this sorted. Using this tool will show you the best order of paying these off and illustrate the impact and importance of paying more than the minimum.