- Change theme
it's an internet thing! est 1999
Easy Tips for Managing your Money
Do you dread receiving your next bill? Do you have fears you won’t be able to pay it?
18:55 28 October 2019
You are not alone; millions of Australians struggle every day with financial woes. Usually our incomes are decent, but still we run out of funds and find ourselves in distressing situations. Do not despair; there is a way out.
In most cases, income is not the problem; our lack of self-control and education lead us down the path to ruin. Only by taking a step back and assessing your situation will you be able to understand it and control the outcome.
Managing money is an alien concept to many of us, but it is more important now than ever to get a firm grasp of finance, even at a personal level. I have prepared a list of tips and tricks to help you get on top of your money today.
Where you keep your money can play a big role in how successful you are with managing it. All banks are not created equal and it's worth your time shopping around to find one that suits your needs. Some banks offer great investment products that will not only keep your money safe but make it grow larger.
Make a savings account comparison online to see what lenders offer low fee everyday accounts. An everyday account will allow you to make online purchases and all the other modern conveniences of daily banking. For a decent return on your idle savings check out a high-interest savings account, a more limited account designed to amplify your savings.
That much-loathed word, budget does not necessarily mean living basically. The first step to managing your money is to understand exactly where it's going. You might already have a good idea of what you spend your money on, but its best to know what your exact outgoing expenses are.
When creating a budget, spend a month how you normally would but note everything you spend money on. You should now have a clear picture of your outgoing expenses and incoming funds. This ‘money’ map is the start of your financial independence.
Now that you have a budget, its time to slash the unnecessary expenses. A simple reduction in fast food and snacks is a brilliant way of saving money. Eating healthy home-cooked food is easier on the wallet AND the waist. Don’t be afraid to cut entertainment and substitute it for exercise… dreadful I know! But in the end you will be wealthier and healthier, and that’s hard to beat.
Once your budget is set up, and you are sticking to it you should start to see some savings. Savings are the cornerstone of personal wealth and starting a habit now will carry you further when it comes time to apply for a loan or line of credit.
Put your savings in a high interest savings account and grow your money. High interest savings accounts offer a decent return on money that was just going to sit in your bank account anyway. Investing your savings in a term deposit or savings account will remove the temptation to spend your hard-earned cash.
We have touched on investing with term deposits and high interest savings accounts, but there is a huge amount of other opportunities out there for the adventurous types. The principles of investment can be applied to all aspects of your life, and by starting now you will be in good stead for the future.
Debt is the opposite of what we want as cash managing machines, but it almost unavoidable. If you have debts, don’t stress, if you have factored the repayments into your budget you should have no worries. Paying off debts on time will help boost your credit rating, so knuckle down and get them repaid.
For those of you who have high-interest debt such as credit card repayments, fear not there are ways to get out. Consolidating your debt with a lower interest personal loan can give you space to breathe and get your debt to manageable levels.
Nothing sends someone broke quicker than an unexpected disaster. Make some room in your budget for an emergency fund and sleep a little easier at night. Even a small amount of money put aside each week can ease the strain of an unexpected disaster.
The insurance industry is full of fraudsters, leeches, and cheats, but there are some good folk offering decent services if you can find them. Insurance can be taken out on just about everything these days, but some packages are worth considering.
Health insurance not only makes a visit to the doctor less costly, but it exempts you from some taxes. Income insurance could help you if you were struck ill or not able to work for lengthy periods of time. If your budget allows it, consider health and personal insurance for added peace of mind.
Yes, it's dorky, but keeping all your receipts can pay off at tax time. Our taxation system is filled with loopholes and tax breaks available to exploit with the appropriate knowledge. Most personal income tax will be easy enough to do alone and can save you a few hundred dollars. For those with more complicated tax affairs, an accredited accountant is costly but can be claimed back on your next tax refund.
Managing money is a depressingly rare skill, scarcely taught and shrouded in secrecy. In modern society, it is impolite to talk about matters of money, and to me, this is a real shortfall. If we are not exposed to methods of managing money how we will ever develop good habits?
I was fortunate enough to have a brilliant mentor in my parents, who were not rich by any stretch of the imagination, but they always made it work. Hopefully, some of these tips help you on your quest for financial freedom. It is easy to become obsessed with money, but it doesn’t define us. Remember it is better to be poor but rich in friends and family.