With fluctuating petrol prices, high housing costs and uncertainty over interest rates, ‘budget’ is probably a familiar word in most Australian households. But instead of budgeting – just the word gives many of us the shudders – why not try some of these smarter spending strategies to help you reach your financial goals sooner?
Know where your money goes: Everyone should have a plan outlining their financial commitments and detailing their long-term goals. Knowing where your money is committed month on month is an important step to saving in the long run.
The 10% rule: Almost everyone can afford to take ten per cent of their weekly earnings to put aside in a savings account; by taking the money out directly you won’t even notice that it’s gone. This is a much better saving practice than keeping an excess amount readily available, as it removes the temptation to buy non-essential treats just because you have the cash at hand.
Weekly allowance: Give yourself a weekly allowance making sure you have enough to purchase all your grocery needs, with a little extra for incidental spending and other expenses. Keep this money in a separate account to your savings.
Keep debt in check: Avoiding additional debt from credit cards is essential as these can attract huge interest rates. Use the savings taken from your salary instead to make large purchases; another option to consider is to take out a personal loan, which typically charges interest at a lower rate.
Increase your mortgage repayments: Try upping the contributions you make to your mortgage each month. The more cash you put towards your home, the faster you’ll be able to unlock equity to use for other projects or investments.
Being cash conscious doesn’t mean you have to feel like you’re on a strict budget. But removing the excess from your account and planning how you spend your cash can make a big difference to your financial future