If you have a shed, a large laundry or even a linen press in the hall, you probably talk about cleaning it out before every summer holidays.
But, when it doesn’t happen, you face another year of cramming things in wherever you can fit them.
It becomes hard to close the doors and even harder to find another time during the busy year to give it a BIG clean out.
Do you ever think about how you’d use that free space IF it wasn’t swimming in stuff you barely ever used? Clutter can hold you back from doing what you set out to achieve and the same goes for clutter in the purse, handbag or bank account. The more cluttered your spending habits are, the more your life will fill up with stuff you don’t really value. And you definitely won’t have the savings when you want to invest heavily in your future with houses, travel and children, if you’re planning on having them.
So, it’s time for a big spring clean! Here are five simple ways to help you declutter your poor spending habits and start making room for more savings:
1. Track your spending
2. Create a budget
3. Plan to save
4. Set (exciting) financial goals
5. Conduct regular check-ups
Track your spending
Keep a record of your expenses. If it’s written down or on a spreadsheet, you can’t hide from those impulse purchases. We know it’s hard to break old habits, but when you see how all those little impulse purchases add up, you’ll see how much you could be saving. And you don’t need to be a wizard in Excel to do it – just download one of the many apps available today.
Create a budget
This is the best way to allocate your fixed costs, such as mortgage repayments, rent, personal loan repayments, phone bills and utilities. These are the costs you know you have to pay regularly. The other costs are variable, such as groceries, entertainment and other irregular purchases. Make-up, clothing and even the occasional Friday work lunch fit into this category. Groceries might seem essential, but you do have the flexibility to spend more or less. It might just mean home-brand recycled toilet tissue for a while, instead of the Quilton Gold 4-ply. You’ll be surprised at how many areas you can cut back on the day-to-day items and save big over the long-term!
Plan to save
With a firm understanding of your outgoing costs, you can start to dream AND make those dreams a reality. Set up a high interest savings account and allocate an amount that goes into that account every month. It then becomes a fixed outgoing and you won’t think twice about paying it. You’ll be doing it automatically every pay cycle and you won’t believe how fast it grows. And once you realise how quickly it accumulates, there’s nothing wrong with amending your financial goals for something even bigger… even more life changing!
Set (exciting) financial goals
Create a list of short and long-term financial goals. Short-term goals should be set over 1 or 2 years — things like clearing your credit card debt and going on that much-needed holiday. It will feel great as you hit those short-term goals on your way to the much bigger purchases, like your dream home. Whatever your long-term goals are, keep a record of how much you’re saving. It’s a great way to stay on-track and motivated.
Have regular check-ups
Circumstances change, so make sure you fine-tune your budget to keep it relevant. Pay rises, changing fixed costs and emergency spending can move the goal posts further in or further out. Keep reviewing your budget throughout the year, so it remains relevant and most importantly, you remain in control.
Spring is the perfect time to look back at your year and work out where you could have saved more money. A simple savings plan begins with these five tips. As you get into a routine and start to weed out those poor spending habits, you’ll be in fantastic financial shape for the new year!
Contact Kathryn Liebezeit, Authorised Representative (245498) of Hood Sweeney Securities Pty Ltd
AFSL 220897 for more information on managing your money on 1300 764 200 or
Information contained in this presentation is of a general nature only. It does not constitute financial or taxation advice. The information does not take into account your personal situation.
We recommend that you obtain investment and taxation advice specific to your objectives, financial situation and specific needs before making any investment decisions or acting on any of the information contained in this article.
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