5 simple steps to get your finances in order
Not feeling in control of your finances can add a lot of stress & anxiety to your life. In fact, a recent study by the Australian Institute of Family Studies reported that post-pandemic one in six families in Australia were very concerned about their family’s current financial situation. Because so many people are taking on extra stress when it comes to finances, we’ve put together five simple steps to get your and your household’s finances in order and get you back in control.
Step 1: Start checking your accounts regularly
A huge issue a lot of people have with their finances is they don’t actually know how their money is moving. How much is coming in each month? How much is being spent? What is it being spent on? And when you’re struggling to get your finances under control, checking your account balances & credit card debts can be something that seems easier to avoid.
But, it’s important to ensure that you have a transparent view of your accounts, income & expenses. Check them regularly, so you always know where you’re at. Make it easier on yourself by downloading your bank’s account app, so you can check your accounts easily from your phone.
Step 2: Chase some savings
Have a look at your current expenses. What’s costing a lot of money? Are you paying late fees? Do you have lots of little debts? There are a lot of savings hidden in all the little fees or higher rates you might be paying.
Late fees: Paying regular late fees adds up to a lot of extra cash leaving your bank account. Set up automatic payments for any bills or debts that you can and diarise anything else.
Credit cards: Credit cards interest rates are especially high, and not paying it off in full every month could see you paying it off for years to come! Make sure your credit card is paid off in full and on time.
Early payment: A lot of utility companies give a discount for early payment, so being early with your gas bill could end up saving you money. Put aside time every week to quickly pay any bills that have come in.
Debt consolidation: If you have lots of little debts at varying interest rates, debt consolidation could be for you. Rolling your smaller debts into one big loan will not only make it easier to control, but will usually give you a lower interest rate & save you money.
Call all your providers & ask for a discount: Many people don’t bother asking for a discount on their gas, electricity, phone bill or car insurance but many providers have some wiggle room on the price. Your providers should be working hard to keep you & and will often knock something off the price if you ask for it. Schedule in an afternoon for you to sit down and call your providers.
Cut down your spending: There are lots of little things you can do to cut down your spending – things you may not even notice you’re doing!
Step 3: Set some goals
It’s much more fun to start saving if you know what you’re saving for! Are you hoping to save the deposit for your first home, a new car or your next big adventure? Write down your goals for the future, so you know exactly what the pay-off is at the end. In fact, research shows that you are 42% more likely to achieve your goals if you write them down on a regular basis.
Your goals will vary according to your life stage but a common tactic is to divide goals across those that can be achieved in the near future, the medium term and the long term.
Figure out exactly how much you will need, and what you could save monthly towards each goal. You may even want to automate a set amount to go straight into your savings account each time you’re paid.
Step 4: Put a personal budget in place
A budget is an extremely useful financial tool. There are many online tools and budgeting apps or you can simply work out the numbers using pen and paper. The way you develop a budget isn’t the key issue. What really matters is that you track how much money is coming in through your wage, salary or other sources of income, and compare this to money going out in living costs.
Your budget shows if you are spending more than you earn, while highlighting areas where you can cut back to bring your money back under control. If your budget shows you are spending less than you earn, it’s time to put the surplus cash to work building wealth for the future.
Step 5: Have a money mentor
If you’re serious about saving more and reaching some of those financial goals you have set for yourself, it’s going to take commitment. Many people partner with a money mentor & financial adviser (like us!) - someone who will keep them accountable to their money goals while providing some expert advice. It’s not only a great way to gain control over your finances now, but build a financially healthy future.
We believe that financial freedom is feeling in control of your money
At Live Well Financial Planning, we’re passionate about the difference financial planning make to your budget and your life. Having a simple budget in place and taking control of your finances is an essential part of living a healthy financial life. We would love to talk you through how we could help you gain control over your own personal finances. Contact Us to book your complimentary first appointment with our team.