Now that the silly season is officially done and dusted, Aussies are probably finding that their wallets are a little bit worse for wear, with Finder figures revealing more than a third of Aussies felt unable to afford basic necessities over the holiday period.
But all is not lost: although you’ve spent a bit more than you usually would, you can get yourself back into financial shape with just a few tips or tricks.
Related story: 9 things Australian financial advisers wish you knew
Related story: 9 things Australian financial advisers wish you knew
Six money experts reveal the simple changes you can make to your spending to make up for the budget blow-out at the end of last year:
Find the cheaper path
You’re not going to want to hear it: keeping a bit more money in your pocket is going to mean cutting back on the extras, unfortunately.
“Pack your own lunch for the whole of January. Instead of spending $10-$15 per day on eating out, the cost of a loaf of bread and fillings should work out to be a few dollars a day,” said non-aligned financial adviser James Gerrard.
But this is about more than your lunch – apply this principle to other aspects of your life. For instance, leave a bit earlier to catch a bus or train instead of getting an Uber.
And yes – you might need to cut back on your takeaway coffees for a bit. “Make it at home or in the office rather than spend $3.5-$5.5 on take away coffee,” he said. “It may be more inconvenient however think of it as a short-term fix to pay off the credit card balance.”
With every dollar you spend, ask yourself: is it really necessary?
Set yourself up
Have everything in place to save money more intentionally and cleverly – and that means saving for different things at the same time.
“Savings and holiday or lifestyle money should have separate accounts. Then you make sure you are saving for both at the same time (and not always coming home from a trip with a dismal savings amount),” said Fox & Hare financial adviser Jessica Brady.
You’ve probably heard of the ‘bucket’ concept, where you sort your income into different accounts. If you struggle to save, the new year can be a good time to take a fresh approach to your finances.
“Have accounts for specific purposes, then set up direct debits weekly to each of the accounts. That way you don’t need to focus on paying bills and working out what’s left, you only need to track how much is in your weekly ‘spending’ account.”
Set money aside
The easier version of this is just to have another account for your weekly grocery budget that you have to stick to. Going into the new year, we’ve become accustomed to overspending on food and drinks from the Christmas period – but this habit is unsustainable, said Thirdview Financial Planning adviser Peter Foley.
“Create a separate groceries account, and once you’ve reached its limit, make sure you don’t spend anymore.” This way, you can shop less, avoid waste, and take advantage of supermarket specials.
Sort out your gift budget – for the rest of the year
A handy way to save tomorrow is to budget today. To get on top of your post-Christmas spending, Specialist Financial Solutions senior financial planner Stevie-Jade Turner recommends setting up a savings account called Gift Savings.
“Work out how much you spent in December on gifts then double it (to include birthdays). This is how much you are likely to spend on gifts over the next 365 days,” she said. So, if you spent $750 on presents in December, then your gift budget for the year is $1,500.
Divide this number by 52, 26 or 12 (depending on whether you’re paid weekly, fortnightly or monthly) and start contributing that amount into the new Gift Savings account from today. Set up an automatic transfer in line with your pay to contribute to this account for the rest of the year.
“That way, you will not have to cut back your spending January next year, because you’ll be all over it,” said Turner. The contributions are fairly manageable – taking the $1,500 figure, it’s just a weekly contribution of $30.
And it’s even better news for couples as you can choose to split the load.
Make your mortgage cheaper
Aside from saving money on your day-to-day expenses, see if you can shave dollars off regular payments such as your mortgage. Firstly, pay it fortnightly, because you can actually pay it off faster that way, Brady said.
“If you pay it fortnightly you will actually end up making one extra repayment per year which can save thousands in interest over the life of your loan. Make sure you set it up to pay half of the loan amount,” she said.
Then it’s about making sure you’re getting yourself the best deal possible: mortgage, energy and utility providers, and health insurers all love lazy customers. Shop around to save money not just in January, but all year. “I had a client save $800 a month (a month!) by doing this.”
Get organised – and stick to it
Do you have a credit card hangover? According to Fox and Hare financial adviser Glen Hare, you should set a fixed amount that you can pay off on a monthly or weekly basis and stick to it.
“A fixed repayment amount ensures you know exactly when you will be debt free. Paying the minimum or ‘whatever’s left over’ from each pay cheque gives no certainty around when you’ll achieve you’re debt free goal,” he said.
“Make sure you’re realistic as you don’t want to set yourself up to fail.”
Make money your best friend
Treat your finances like your best friend, says Firefly Wealth and The Savings Squad founder Adele Martin: don’t ignore it, and regularly check in to see how it’s doing.
If you’re ready for a better long-term approach to your finances, set up a money date night regularly, and involve your partner, too.
According to Martin, the kind of things you want to sort out on a money date might include:
how we are tracking against our budget
what bills/registrations are coming up for the next month (e.g. licences, kids, sports etc) and assign who is going to pay them
any expenses that you need to be reimbursed for or items need to return
pick a bill to negotiate e.g. electricity
confirm how you’re tracking to your goals: are you still working on what’s most important to you?
If you can’t get your partner on board with the money date nights, that’s no excuse, says Martin. “Take extreme ownership of your finances and be an example for your family.
“Try to keep it as fun as possible – who says you can’t have a glass of wine or your favourite music playing on your money date?”
Don’t draw it out, either – keep it to half an hour, maximum, Martin recommends. “But do schedule it and put in diary and treat it with the same respect you would a date with your best friend.”
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