Many people ask me what I think the future might hold. “What are Lenders going to do next, or what’s the market going to do next year?”
I believe that these are the wrong questions to be asking yourself if you really want to get ahead.
Here are a few things that you could be thinking about in order to create more stable and financially successful life of your own, which means thinking about the things that are in your control, rather than focusing on things that are outside of your control.
Saving money through budgeting is all about finding your own groove and getting into a Rhythm of Saving Money. I know people that have never put time into working out a budget at any point in their lives. For the people in the world that work from a budget mindset, this will amaze you. But sometimes the simplest budget is the best one.
Give this some thought. What if you worked out how much you wanted to save for your future each week, you dragged this out of your account automatically into a place where you couldn’t touch it, and you lived off what you have left? Sometimes people avoid budgeting because they think that they must work things out line by line, right down to the toilet paper that they buy.
This is simply not the case. You just must start with the end in mind. I want to save $X over Y period. From there it’s a simple equation to work out how much you need to tuck away “from yourself” to achieve this. The trick to this is to start small to get your confidence that this will work. Start with a figure that is so simple to achieve that you can’t mess it up. Then step it up over time.
An example would be that you set up a FREE online banking account that is not linked to your Eftpos card. On the day that your pay drops in, you have an automatic transfer set up to grab $15 each time to tuck it away into your “thinking about the account”. (I don’t know about you but I spend $15 when I go to subway to grab myself lunch) After a while you might see that you are managing easily and you are not missing the $15, so you step it up to $20, then $30 and so on. Before you know it, you’ll be in a “Rhythm of Saving Money.” The trick is to start Now! It’s never too late to start anything. Heck, Colonel Sanders started Kentucky Fried Chicken after he turned 65 years old.
I can hear you all thinking, wow, what a genius (insert smiley face here) and I know this sounds obvious, but it’s harder than most people think. Spending less than you earn isn’t about making sure that only shop when the clearance sales are on. It comes from really looking at what are the critical things that you need to live, and what are the nice to haves in your life. Everywhere you look, whether that is on social media, TV, on the side of buses, even subconscious advertising, you cannot escape the advertising that’s designed to make us think that we are saving money by purchasing something today. However, a lot of the time these things probably fall into the nice to have category in our lives, not the critical to living category.
Spending less than you earn isn’t all about spending, remember there is another part to this equation and that’s the earning part. If you kept your spending at the same level but increased the amount that you earn, you can get the same desired result. So, ask yourself, “Can I create a Side Hustle for myself that will make me money?”
Why pay a fee if you really don’t have to? In the same way that tucking a little of money will eventually go along the way, you need to think critically about if you really need to pay the fees that you are. Think about the annual subscriptions that you pay on Netflix, Foxtel and Stan. Do you really need to have all three? Do you really need to have both Credit Cards that both have annual fees and charges? Or could you consolidate your credit cards into one easy low rate option? Do your bank accounts need to have a monthly fee, or with the modern banking accounts that are now available, could you just have the one transaction account and maintain no fee online accounts for the other accounts?
Generally, the three biggest expenses in most people’s lives are housing, transportation and food. There’s a pretty good chance that you are not going to spend money on anything more than the total amount that you spend on these three categories.
If these are your three biggest categories of expenses in your life, then this is a good place to start when it comes to chipping away at what you spend. Can you save 4c per litre off your fuel? Is there a discount docket offered for your shopping so you can save 10% on your shopping each week? If you purchased something online would you save money? Could you sublet that spare room in the house that you are renting for $100 per week? If you think a little creatively you will find some low hanging fruit for sure.
So, saving money doesn’t have to be painful or boring. Have some fun with it, be creative, be brave and start finding your Rhythm today.
Learn more about the Author Nathan Drew.
Nathan joined Fox Finance Group in 2018 to help drive the strategic growth of the business and also help build on the solid foundations that have held strong in the business since 2006.