12 August 2015

Savings & Budgeting Tips

Money is one of life’s greatest tools. It can buy convenience, freedom, great experiences and makes life just easier.

Here are some ideas to kick start your savings and budgeting with our practical tips.

Personal Finances

  1. Create a realistic budget. Before you can save you must work out how much money you have and how you spend it. Without a budget, you really don’t have a chance at saving money..
    You can download a budget spreadsheet here.
    https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner
  2. Save little, save often. Forget stretch goals/targets. Focus on little savings everyday. If you get something cheaper than normal, add that saving into your savings account and watch your savings accumulate. Don’t try and save $100’s of dollars each pay if you are only going to withdraw it later.
  3. Get a cork-board and start to visualise your money for the year. A corkboard can be used for pinning upcoming bills, events that cost money and inspiring way to save money for the week. Use the cork board to hang pictures of what you can do with the extra money to further motivate yourself.
  4. Refinance your mortgage. Don’t continue to pay the old rate. Compare and refinance your mortgage for a better deal. Check break costs and exit fees but weigh up whether a new mortgage, with a lower interest rate will help you save money.
  5. Do a credit card check. Check out your current credit card interest rate and find out if there are better offers – visit infochoice.com.au or canstar.com.au. Be mindful of credit cards with reward programs as a higher interest rate usually applies.
  6. Debt consolidation. Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others. By combining all your debts into one place with a lower overall interest rate will save you money and provide the convenience of servicing only one loan.
  7. Open your first term deposit. Don’t rely on a term deposit to make you rich, but try and sneak away a cool $1000 or $2000 into a term deposit for motivation this year. There is something amazing about having a sneaky couple of grand set aside in a term deposit.
  8. Check out a mortgage offset account. Non-bank lenders, credit unions and building societies can often by cheaper than many of the big banks.
  9. Switch your bank accounts to a facility that respects you. You should not be spending your hard-earned money on maintenance fees – you should also be earning more some serious interest on your checking and savings accounts Check online for best free checking and savings accounts.
  10. Package all personal finance accounts in one place. There are potential rewards and discounts on insurances and other financial products by having your finances under one roof.
  11. Bank the pay rise or bonus. If you get either a pay rise or a bonus – split the ‘new money’ you receive in half, invest one half and bank the other (either into your debt or savings account). So say you get a rise of $100 per fortnight put $50 into an investment or term deposit account and put the other $50 into your savings account.
  12. Contribute extra into superannuation. Even small amounts add up over the long term. Even an extra $50 per month will add up depending on how long you have until retirement. So don’t forget the huge difference a small extra amount can make to your retirement cash.
  13. Check your current insurance policies. Do not treat your insurance renewal as simply another bill. Check and read your insurance policies (car, home, contents, life) and see what you are covered for and what is excluded. Look and compare combining policies with an appropriate insurance provider who provides a multi-policy discount.
  14. Review and compare your health insurance. Also check your current health insurance and see what you are covered for and what you actually need. Compare health insurance providers and get the best deal.
  15. Use an accountant this year. So many people opt to do their tax returns themselves. Whilst the ATO’s eTAX system is pretty good, getting an accountant to do your tax return can help free up your time and often they will find deductions that you never knew existed. If your situation is a little more than basic (ie; you are employed, have some investments and perhaps run a business) – pay up to $150 for your tax return this year and watch the savings you will make. Often the investment in a tax return nets far more than $150 in return.

The author is an employee of Verante Financial Planning in Castle Hill, Corporate Authorised Representative of Magnitude Group Limited, Licence No 221557, Magnitude Group Limited ABN 54 086 266 202.

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