There’s no magic recipe to being “good with money”, it takes a lot of focus and planning to develop the habits that will allow your bank balance to grow instead of disappear. That being said, saving money is easier than you may think, and by incrementally shifting one’s mindset to focus on where you can save little by little, you’ll eventually notice a massive impact on your financial wellbeing. We’re going to look at some of the habits worth implementing that you can start today.
Get into the habit of budgeting
This one may seem simple, but it’s a habit that requires a lot of discipline and a willingness to plan. It’s not necessary to plan each and every transaction you’re going to do, but planning and budgeting the big monthly expenses is a good place to start. This helps you keep track not only of what you got, but it gives you an object way to assess what all the essential things are you need to keep in mind. Having a budget you can quickly refer to will also help you stay in line with your spending by having a guideline to work towards. As the saying goes; “out of sight, out of mind” – keep your budget front and centre.
Categorise your spending
Once you’ve got a budget, it’s a good idea to separate your expenditure into two groups: what you need and what you want. Necessities need to take priority, since things like rent and groceries are crucial and shouldn’t really be a part of how you calculate your disposable income. Make a list of all the things that are crucial; bond repayment or rent, groceries, medical aid, etc – and subtract get a total. Once you’ve got that total you can calculate what’s left over, and only once you’ve got that amount should you even start considering the things in your want column.
Don’t let sales trick you
Sale season is a veritable craze these days – every retailer is doing it and it’s pretty tricky to resist some of the massive price cuts. What you need to consider before you get that pair of sneakers (guilty) or console is whether or not you’re going to get a lot of use out of the sale item. If you’ve already got 3 or 4 of the thing you want to buy, does it really matter that it’s 50% off? Possibly not. We’ve all got things lying in our houses that we got because it was on sale at some point… but the items are sitting gathering dust, aren’t they? It’s a bad idea to spend money on something just because it’s at a better price, if it’s at a better price and it’s something you’ve been considering for a while, then it’s safer to pull the trigger on it.
Save for big expenses over time
Big things like car services, house maintenance, or your rainy day account for emergencies shouldn’t be spent on in chunks. These are things that should be in your annual budget and that will ideally get a little bit of a contribution every month. This way, when the inevitable expense comes around, you’re not going to have to panic to make ends meet because you’re already made accommodation for them and will have put something aside.
Ask the professionals for advice
When it comes to financial habits it’s best to pick the brains of the experts when you need technical advice. It’s all good and well to chat with friends and family and hear their views, but when it comes down to making important financial decisions you’re going to want to get a professional’s take on a situation before you commit to a decision. This is where our friends at Ask Advice can help you out – they’ll give you some expert advice on your queries, and if you need a consult for some in-depth help you can book that with them too. And, it’s free!
Getting a handle on your finances doesn’t have to be a daunting exercise – starting early with some frugal habits is always a good idea, but also consult with the pros so they can advise you on the best way forward to get your money working for you!
Check out Ask Advice here and drop an advisor a message with any queries you may have.