Love budgeting!
I wouldn’t be scared of the ‘B word’ – budgeting. In fact, I’d make a bit of a game of it, tracking where my money was coming from and cracking the mystery of where it was going.There might not be much I could do about my income, so I’d focus on the spending side; working out how much I had to spend and what was ‘discretionary.
Chances are I’d be shocked by what I discovered – spending on things I really didn’t need or particularly want, and not spending on things that are important to me. I would also set some short-term goals such as saving for overseas travel, a home deposit or supporting a good cause, while leaving room for fun in the here and now. Without being too rigid my goals would help me to prioritise my discretionary spending, support a considered savings plan, and help me get more, not less, enjoyment out of life.
Pay off my credit card in full every month.
While convenient, credit cards can be a real trap. Touch and go technology in particular makes it easy to spend without thinking of the growing debt. If not paid off in full within the interest-free period each month the carry-over balance will start to accumulate interest at well over 10% pa, sometimes up to 20%, magnifying the debt and making it harder to repay. Instead I’d use that interest-free period to my advantage. Paying all of my expenses with the same card would allow me to keep my cash in a higher interest account or mortgage offset account and earning (or saving) valuable interest until the credit card payment date. Or if I was too easily tempted, I’d either reduce my credit limit or use a debit card to help make sure I didn’t spend more than I could afford. My credit rating would love that!
Buy a pre-loved car.
As soon as you drive that shiny new car out of the showroom its value drops by thousands of dollars. You don’t notice it, but that’s real money down the drain. That’s why one of the great and often quoted financial tips is to buy the cheapest car your ego will allow you to. Cars are now far more reliable than they used to be and the remainder of the new car warranty, which can be up to seven years, will often transfer to the new owner. Much of the loss in value on new cars – the depreciation – occurs in the first three years. Going for something with a few k’s on the clock would save me thousands. I’d also check out the service costs of the car I was thinking of buying. They vary enormously with the make of the vehicle and can really add up over the years.
Please contact us on 0415 306 000 we can help you work out your combined financial goals, budget better and develop a plan to help you grow your wealth so that you can achieve your goals.
Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee takes any responsibility for their action or any service they provide.