No matter what stage of life you are at from starting out as a young millennial, a working mum, experienced professional or a retiree, it is important to get savvy with your finances. Sadly, many Australians of all ages are failing to do so.
Think about your spending habits: Are you a spend thrift or an absolute scrooge when it comes to managing your money. Do you know where it goes each day, week, month, and year? Have you set financial goals? or perhaps you are like other people that simply don’t know where to start so instead they do nothing instead hoping and praying to win the lottery.
Firstly, let’s take a look at some of the facts, according to new research conducted by ME Bank, 70% of Australians have poor credit habits including:
- 27% of Australians admitted to not paying their credit card balance off in full each statement period.
- 32% pay the minimum amount on their credit card limit.
In a recent Canstar article titled ‘How Much Do Australians Save On Average?’ It was reported that:
- 49% of Australians have less than $10,000 in cash savings;
- 24% of Australians have between $10,000 to $50,000 saved; and
- 27% of Australians had more than $50,000 in savings.
Below are 18 simple, practical tips you do today. All of these tips are based on my own opinion to help you become more financially savvy:
1.Financial Goal Setting:
Set your financial goals and obtain professional financial advice on how best to achieve your goals for your personal circumstance.
2. Where are you now?:
Take the time to throughly review all of your financial documents to ensure understanding and to give you an overall picture of where you are at currently. Decide what changes need to be made to achieve your goals.
3. Manage Your Money:
Use a money app or an excel spreadsheet to write down every bill and expense you currently pay. You may be surprised at what some of your largest expenses are or where the majority of your money is going.
4. Check Your Bank Balance:
Regularly check your bank accounts to check the balance and for any incorrect debits.
5. Money Diary:
Write everything you spend for a month in a notebook to fully understand where your money is going.
If you do carry cash, be sure to clean out your wallet. Have your cards and cash in your wallet in an organised manner and get rid of any old receipts or anything you do not need to keep in your wallet.
7. Emergency Fund:
Set up an emergency fund with $10K as a minimum that you are unable to access on a daily basis.
8. Credit Card:
Use only one credit card as it will negatively impact your credit score, the more credit cards you have. Select a credit card that has your favourite airline rewards so you can use your points to travel.
9. Credit Report:
There are a list of providers you can contact to receive a free copy of your credit report. There are 5 credit ratings from Excellent to below average. Check to see what your score is as this impacts your ability to apply for loans and credit cards etc.
10. Superannuation & Insurances:
Regularly review your superannuation accounts and insurances such as life insurance, Total Permanent Disability (TPD) and income protection etc to ensure it meets all of your needs for your personal circumstances. Seek professional advice and read the fine print to ensure the insurance meets your specific requirements. Avoid having multiple superannuation accounts as your money go to fees rather than be paid to you.
11. Cash Back:
This is one of my favourites and so simple. Shop on Cash Rewards to receive a percentage of cash back depending on which store you choose. There are loads of stores available and offers both online and instore.
I really love negotiating with my service providers and be sure to check their websites as their offerings change frequently particularly for internet and mobile phone providers, electricity and gas providers.
13. Invest in Shares:
Learn how to invest in shares, you can do so with very little money upfront. The key is to get started and learn as you go.
Open up an ING account, no fees and you get money back when you withdraw cash unlike others institutions which charge you fees for accessing your own money.
This is life changing for most people and something I ask my clients to do and they are amazed at the results it can achieve. It is incredible how much stuff people collect over the years with the vast majority of it being stored someone just in case. I love minimalism so I find it very easy to sell or donate items I no longer want or require from clothes, books to furniture. Clean up your apartment / house and or garage and sell all unwanted and unnecessary items. My favourite is Facebook Marketplace as you connect directly with your community without paying fees.
16. Blessings Journal:
Create a blessings journal and write down all of the discounts, deals and freebies you receive from switching service providers, store cards, department store or credit card rewards and food deals.
Sign up for Skilled Smart – The Money School for Adults. A fun, practical way to educate yourself and gets your finances sorted.
Highly recommend purchasing a copy of the bible to getting your finances in order – Scott Pape’s book ‘The Barefoot Investor’.
Visit SugarMamma tv – Canna Campbell is a financial advisor and offers fabulous inspirational yet practical resources on her blog, books and YouTube Channel to help you stay on track.
As mentioned, seek professional financial advice to decide what is best for you and most importantly have fun getting savvy with your finances. The best part about regularly reviewing your finances it that it can help you to save hundreds to thousands of dollars so it will be well worth the investment of your time.
As Benjamin Franklin suggests: ‘An investment in knowledge pays the best interest’.
IMPORTANT NOTE: This article is for informational purposes only and does not constitute financial or investment advice. This article should not be considered a solicitation, offer or recommendation for the purchase or sale of any financial products and services discussed herein. Decisions based on information contained herein are the sole responsibility of the person viewing the website.