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5 Tips to becoming financially savvy

29th Apr 2019
Belinda Baker

We all dream of being financially secure. It is not as hard as it may seem with these 5 tips below you can begin that journey

1. Living within your means is spending less than what you earn per week.

With easy access to credit cards, personal loans, ezipay etc it is proving more difficult for people to live within their means.  To get your finances under control you need to know how much money you are earning and spending per pay cycle after tax.  As simple as it sounds, the amount that you earn needs to be bigger than the amount that you spend!

2. Budget – Many people don’t like the term budget it scares them or makes them feel restricted.

A budget is a necessary evil if you want to bring your spending under control. Knowing where your money goes after each pay day is important so you can get on with saving for that holiday or new home.  The key to a budget is to take some time to sit down and go through your transaction account and break down on piece of paper where you are spending your money. Once you know this you can then start putting a plan together to start saving some money. A couple of examples of potential savings can be from checking your insurance policies (car, home, health) and your mortgage (if you have one) every year to ensure you are getting the best deals. Another example is taking your lunch from home instead of buying it every day. $10 per day for 5 days is $50 x 52 weeks is $2600 per year you can potentially be putting into a savings account.

Start small, save the little things and you will find that the bigger things start to become easier as well.

3. Build a Vision Board to keep you motivated and bring them to life

I am a fan of vision boards.  I update mine every 12 months and I look at it morning and night to keep me motivated to reach my goals. Some examples of things that can go on your vision board are holiday destinations, motivational quotes, health, goals you want to achieve, saving money, a new home; it can be anything really. Find images that relate to your examples and pin them to a board, or blank art book or glue them to a poster.  Take the time to reflect on your vision board, and take the steps in achieving what you desire

4. Set Goals/Dreams

The thing to remember about goals is baby steps is better than no steps. On your vision board what thing do you want to achieve first. Once you know this you can put small achievable steps into place to help you get there.  No, it won’t be easy. Yes, there will be times you will want to throw in the towel but if you truly want something only you can make it happen. Keep focused, keep your eye on the prize you can do this.

5. Good debt Vs Bad debt

Good debt helps you build your wealth or get your own your way to wealth. Bad debt is something that costs you money without improving your financial situation.  Good debt can be buying an investment property, buying shares or improving your education through a student loan which may help your career prospects.  Bad debt is a credit card or personal loan that pays for your everyday living expenses. Or a car loan where the asset tends to depreciate over time.

If you are serious about getting on track starting with your financial position these few points will get your started on that road. Then the rest really is up to you.