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Financial adviser shares 4 practical tips to fight inflation

Here are some super practical tips to help you get on top of your finances without giving up your favourite things.

A composite image of Australian money and financial adviser Jess Brady.
Financial adviser Jess Brady gave her top tips to fight the rising cost of living. (Source: Getty / Provided)

The rising cost of living has hit Aussies from all backgrounds, but there are some practical things you can do to fight inflation without giving up your morning coffee.

Financial adviser Jess Brady shared her tips with Yahoo Finance on how to get on top of your finances and why each step is important.

Assess where your finances are at

OK, so we all know when setting a budget, the first step is to assess where you’re at, but why is this step important?

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“The world has changed a lot over the last year. Inflation is at a rate most young people have never seen in their lifetime,” Brady said.

“Be it in their rent, their mortgage, HECS or just their grocery bill. So, if you haven’t taken good stock of the financial impact to you and your bottom line, it's highly likely your financial goals are not on track to be achieved in the timeframes you had hoped for.

“Just like we take time to assess our careers and next steps, we need to do the same with our money.”

Set goals

Setting goals doesn’t mean you have to go big. For some, being able to have more money to put towards rent or a mortgage is a goal in itself.

But Brady said it was important to know where you were going, regardless of how big or small the goal may be.

“If I dropped you in the middle of the ocean and asked you to get to a certain destination, you would probably want to know a few things: ‘Where the hell am I right now exactly?’ ‘Can I have a navigation system so I know where I am going?’ ‘What conditions should I plan for?’” Brady said.

“Otherwise, you will probably be aimlessly adrift in the sea with no clear idea where you are or where you are going. It is exactly the same with your money.

“Knowing what you want to achieve financially means you can build it in your cashflow plan, it means you can cut your spending on stuff that isn’t as important in your quest to reach your goal.”

A few things to consider:

  • What do you want to achieve and by when?

  • How much will you need (factor in inflation if it’s a while away)?

  • Review your cash flow and make sure you can factor it in (treat goals like any other bills, don’t save what you have left)

  • What do you need to say no to or reprioritise to make it happen?

  • Break the goal down into smaller, easier-to-manage tasks or dates so you can check your progress and make sure you’re staying on track

  • Do you need an accountability buddy to keep you motivated or whip you into line when you need it?

  • If you are investing, how much risk can your goal handle? What kinds of investments are you comfortable investing in? If the balance reduces with market volatility, how do you think you will react? How will you stop yourself from making a rash decision?

“Most people want to achieve amazing goals in their life, they just struggle to connect the dots to make their dream a reality,” Brady said.

“I have seen people with modest wages achieve great things, did it require sacrifices? Of course. Was it worth it? Yes.”

Prioritise your money and do your research

There are so many things that can influence our financial decisions, whether it be lessons from friends and family, what we read or even social media trends.

But how do we know which money habits are good and which are bad?

“In my experience, most people’s money memoirs (our thoughts, feelings and behaviours around money) are harmful. Before prioritising your financials, I believe everyone (irrespective of income, career status or bank balance) needs to get really clear on what they believe about money,” Brady said.

“What childhood lessons are helping or hindering you? What do your financial habits look like? Taking some time to reflect and observe these can offer huge lightbulb insights.

“If you find that you do, in fact, have an inner money saboteur holding you back, no amount of budgeting can fix that. So, start there. Your relationship with money is going to be lifelong. It needs to be a healthy and productive one.”

Brady said it was important to feel excited when thinking about your goals. Be creative with how you “gamify” your spending account so you don’t rob your savings accounts when you are feeling down or want the latest and greatest thing that’s hit the market.

“Get curious, find trusted experts that you feel are a good fit to learn from. Read, listen, do programs to level up your money skills. Just start, don’t wait for the perfect moment, there isn’t one. Block out some time and use it to learn,” she said.

“Will it feel challenging in the beginning? Yes. But, waiting to be confident before you start is a fool’s game. Confidence comes en route. We didn’t know how to walk, talk, write, do the macarena – we had to learn. We fumbled, failed and got frustrated … but we kept going. We need to do the same with money. Your goals are too important to give up on.”

What can I do right now to fight inflation?

“Giving up your much-loved latte feels cruel and unjust. If you love them, keep them! If you don’t get lots of enjoyment out of them, ditch them. I don’t mind people spending money on things, as long as there is commensurate value and it’s not at the expense of your goals,” Brady said.

If you haven’t got a wage increase in line with inflation, Brady suggests doing the following:

  • Firstly, make sure you know the market rate for your experience, expertise and value. If you aren’t being paid in line with that, a business case for a raise or looking for an external opportunity that helps you bump up your pay might be a necessary step.

  • Review your spending: It can be terrifying, but those transaction statements don’t lie. They can help you see where your cash is going and where you are aimlessly wasting money on stuff that isn’t making your life a whole heap better. Cancel subscriptions you don’t use. Call your providers and ask for a better rate or tell them you’re looking elsewhere.

  • Hack: Find ways to cut costs, join a co-op, borrow and swap, don't buy new, join the library (they also have libraries for many cool things like tools, camping gear…etc). Our grandparents were experts at making clothes last longer, meals go further – both for our budgets and the planet, we need more of it.

  • I also want to acknowledge, right now, there are many people who are very across every cent that leaves their account … thinking people can budget their way out of poverty is an ignorant idea. If this is you, consider if there are other ways to bring in cash, or what you can learn about now for when the time comes.

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