Some clients that we speak to feel like buying a property will never be within their reach. BUT, there are lots of easy little things you can do that make a big difference to the money that you can save, either when scraping together a deposit, or to help pay your home loan off as quickly as possible to give you financial freedom sooner.

Here’s 10 little tips that are easy to do, but that will make a BIG difference to your finances:

 1. Set Financial Goals

Don’t overlook the importance of setting financial goals. Just like in your personal life, setting a goal will give you something to aim for and to motivate you. Think about what you really want to achieve. This could be something to help get you out of debt, or a savings goal for something you’re dying to have.

Paying off your home loan as soon as possible or making contributions to your superannuation are two of the best savings goals you can set. Concentrate on the home loan first, and when that’s under control make superannuation the priority. Any extra savings you put into the home loan is equivalent to investing and earning a 7 per cent after-tax return, which is pretty hard to achieve anywhere else these days.

2. Get control of your finances

Sometimes it seems like your money just disappears and you’re at the ATM more often than is good for you. It’s so important to know exactly where your money is going each day. Sit down with your bank and credit card statements, with a pen and paper, and list everything you are spending money on, from rent and food to clothes, coffees, transport. Everything. You’ll be amazed at what you see, and you’ll instantly see where your money is being wasted.

Take around a notebook for a month and write down every time you spend cash… a newspaper, coffee, sandwich etc. At the end of the month look at your list and I bet you’ll be amazed at where the money goes and you’ll see some obvious areas to save.

3. Write a budget, and stick to it!

So many people ignore writing a budget and then wonder how problems sneak up on them. Sit down and go through the list of expenses. Figure out where your money is going, what you can cut out of your spending, then write up a budget telling you how much of your pay cheque goes into the savings account, how much to your necessary expenses, and how much to play with. Most importantly, stick to your budget!

4. Fix your banking

You are mad to be putting up with a bank account that costs you money. Most of us have a range of different savings and transaction accounts with a bank. Each of them probably attracts a certain level of fees. It’s time to assess all these accounts which have built up in number over the years and see which ones are really needed. Consolidate accounts or shift them to lower or no-fee, online accounts which usually earn great interest.

5. Get your tax right

The yearly tax return can be such a boost to achieving your financial goals. Throughout the year collect receipts for things that you might be able to claim on tax. Was it a work related expense? These days the list of what you can claim is endless, from sunscreen for builders to textbooks for uni students. If you are organised and proactive, you can get a lot more out of your tax return.

Start with the Tax Office website (www.ato.gov.au) which has a list of accepted deductions for a range of different types of jobs.

6. Stay away from credit

Credit cards are dangerous and you should stay away as much as possible. If you’re in financial trouble, cut them up. So many people underestimate, or just don’t realise, the damage that credit card debt can do. If you’re disciplined and always pay it off on time, then you should be fine. But if you’re not sure, you could end up throwing money down the drain. If you have debt, always pay it off before trying to save. You’ll never be saving money if you’re paying 18 per cent interest on your credit card.

Get a Credit/Debit card instead, which can be used like a credit card but takes the money out of your own account.

7. Beat the home loan

The same goes for the home loan. Always think about how you can wipe some time off of your home loan by paying a bit more. Do anything to increase monthly payments, pay fortnightly or just pay off a bit extra when you can, and it could end up saving you thousands.

A mortgage broker can help you determine if you have the best deal on your home loan, or can even negotiate a better deal for you with your existing lender.

8. Save money

If you get proactive about cutting down your costs it’s amazing how much you can actually save. Look around for better deals on home, car and life insurance, bundle them, ask for discounts. Walk around your home and look at everything pushing up your bills. Now decide whether you really need the second fridge or electric heating. Look at everything you’re spending on and find a way to do it cheaper. There’s always a way.

9. Start a savings program

It takes discipline but it’s worth it. Here’s an idea. On pay day every month organise to have 10 per cent of your salary automatically transferred into a separate savings account. It happens automatically, you’ll forget about it and adjust your life to surviving on the remaining 90 per cent, plus you’ll be amazed at how quickly the balance in the savings account grows.

Another idea is to empty the change from your pocket or purse at the end of each day and put all the loose gold coins in a jar. When the jar’s full, bank the coins in a savings account. Watch it grow.

10. Earn more money

You might find that you just need to earn more money. Think about ways you can boost your income, either within your current job or by doing something else on the side. Sit down with your boss and discuss whether you deserve a pay rise and what you can do to earn it. Or you could start up a small business and moonlight in your spare time.

If you’d like assistance with a new financial start, please feel welcome to call us on 0411 066 616.

 

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