Yahoo Finance The first step to getting richer
There are two words that send normal people to sleep or running for the exits: budgets and super.
I’m not going to try to get you to read something about both of these crucial vehicles to making you richer, but I will have a go at one of them: budgeting.
But I want to call it something sexier, such as “the first step to getting richer!”
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Channel Nine’s Today program asked me to review the budgeting businesses out there, and the researcher shot me over a series of questions a lot of other younger (and even older) people might be asking, because as that old Simply Red song goes: “Money [is] too tight to mention”!
Here are the questions, and my answers:
Q. What fees do these businesses charge?
Some might charge an upfront fee but most would have an ongoing fee, as the business would want to keep you as a client and keep you on the straight and narrow.
The more complicated you are and the bigger your money problems, the bigger the fee could easily be.
That said, these ongoing fees would be worked into your newly created budget, so it should reduce the pain.
Q. Are they reliable?
I’d say yes, as it is their business model to turn a money chaos person into an organised planner/user of money.
Ultimately, the success of this business with its customer will be linked to the commitment that customer has to getting their money house in order.
Q. What do they actually do?
They get you to understand what income you have and then what you spend.
The idea is to make you see your cash flow and to plan what lies ahead. Generally, your income is pretty constant but something like tax returns can bring along nice windfalls that actually should be anticipated in a good budget process.
The real curve balls come with your spending. A good budget anticipates lumpy payments and tries to smooth them out by making provisions for when the outlay has to be made.
For example, if you’re self-employed, you might work out your probable tax bill and then put money away each month to make sure you don’t face a cash crisis.
From a householder’s position, you might be an end-of-year holiday goer where you spend $3,000 over a great break, so a good budget might get you saving $60 a week or $120 a fortnight, depending on when you get paid.
A budget-helper or ‘money coach’ might even suggest you ‘GST your life’ by imposing a ‘tax’ on your spending of 10 per cent to try and build up savings to pay off a credit card, to save for a deposit for a property or so on.
It’s about replacing an organised approach to flick chaos in your money world.
Q. How do they store your financial information?
They’d store according to the Privacy Act 2012 and they can’t share your data without your consent.
Q. At the end of the day, are they only giving information that you could research yourself?
Yes, but people need money coaches, just like they need dieticians, personal trainers and business coaches.
You don’t get rich in a day, but daily. It’s about the right processes and having someone keeping you committed.
If you’re unwilling to pay someone, even consider buying my book Join the Rich Club, which has a budget template on page 42 that can help you. However, you will have to fill out the information boxes and then force yourself to change yourself!
Yes, you can do this budgeting bit by yourself but getting help to get richer often involves paying for success and I always say: “If nothing changes, nothing changes.”
And as I always say “anything worth doing, is worth doing for money!”
I hope this has made budgeting, which is the important first step to getting richer, more sexy.
By Peter Switzer.
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