With over 18 years experience, Elissa is DPN’s Enterprise Strategy Leader and a passionate advocate for helping people to build financial independence.
If you’re slipping into bad spending habits, struggling with debt or fearful about the future, it’s time to put a process in place, to get your finances sorted and feel financially well.
Recently, at one of our events, we talked with Jade Khao, Financial Planner from AON, about the fundamentals of good money management.
While it’s not rocket science, when you have a system in place it will put you in good stead for managing your money sensibly now and in the future.
Here are 5 steps to better money management.
1. Set a goal
One of our younger clients, 26 year old Brent, had no savings because he didn’t think he could get into the property market – ever. By making some sacrifices and having a realistic goal, he’s on his way to saving $10,000. A 12 month plan involved saving $200 per week and limiting his weekly spend on coffee and going out. He was fortunate enough to be living at home with his parents.
This is one example of how goal setting works. Tips for setting goals are:
First ask yourself what you want to achieve. What’s important to you in life? Is it to pay for you kid’s education, take a holiday each year, be debt free?
Next, it’s time to set ‘SMART’ goals, in terms of actions that are specific, measurable, achievable, realistic and time bound.
Remember that goal setting is like scaffolding and must be broken down into little steps. Set a long-term goal and lots of little short-term steps to help get you there over a period of time.
Talking to a professional can help you with effective goal setting.
Elissa talks money matters with Jade Khao, Financial Planner from AON.
2. Uncover your spending habits
It’s impossible to manage what you don’t measure. Most people are amazed, and maybe even appalled, at the money we waste without even noticing. When you truly look at where it’s going, you can start to manage it. To do this, you can:
Analyse your credit card statements.
Write down what you buy and what you spend in a journal every day.
When you become aware of what you buy and spend, you’ll quickly see if and where you need to change your current habits. To create a budget, first ask yourself what you’re prepared to sacrifice. Then, make it visual with a budget app or an excel spreadsheet. Other than cutting costs within your daily life, there are many ways to increase savings, such as:
Consider refinancing your existing loans.
Selling old items on Ebay.
A term deposit for cash savings.
Finding better deals with service providers, such as energy plans, phone, internet, health and car insurance.
Asking for a pay rise.
You can compare prices for providers here, and find more ways to save, here. It can make a significant difference. For example, one of our clients really wanted to go on a nice holiday with his family, but he was paying 5.59% interest on his home loan. DPN was able to refinance his loans to a much better rate and he has saved $11,000 annually.
4. Implement a system to stick to your budget
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Book in your goal setting consultation today.
It’s vitally important to use a system to stick to your budget. At the end of the day, we spend what we have access to. The problem with this is, we work really hard for our money but we don’t make our money work hard for us. When you start micromanaging yourself to create better habits, they’ll come naturally with time. Systems include:
Utilising multiple offset accounts to separate amounts of money.
Withdrawing a set amount of cash weekly to live on.
Use apps to ensure you’re always acting in accordance with your budget.
5. Review goals regularly
Regularly reviewing your goals helps you to take control and stay motivated. It’s not rocket science, but much like a fitness regime it requires consistent time and effort.
Make the process easier for yourself
The best help you can receive with proper money management, is a one on one session geared to your needs. Whether it be looking at debt reduction, building savings or learning about investment strategies, this puts you on the right path to building wealth.
Book in a goal setting session with DPN. It’s a free service and will fast-track you to clearing debts, building savings and getting ready to invest. Most importantly, it’s a leap forward towards creating financial wellness.
DPN is an Australian owned business established over 20 years ago and employs around 60 people. It is our mission to help everyday people live the life they want by achieving greater financial independence. We do this by providing innovative finance, property investment and property management solutions, mentoring and education.
This information is provided by DPN Pty Ltd ABN: 94 630 700 186 Australian Credit Licence 514759. DPN Finance Pty Ltd is an authorised credit representative 504129 and related entity of DPN. Credit for Dream Big 100% Offset and Work Smart 100% Offset is provided by Adelaide Bank a division of Bendigo and Adelaide Bank Ltd, ABN 11 068 049 178 and Australian Credit Licence 237879.