As with the start of any new year, the start of a new financial year is a great time to save money by getting into new habits.
Spending patterns naturally change as we move through different phases of our lives. It is important, though, to “clean out” our finances every so often, so that we are not accumulating financial clutter.
If you don’t review your spending, you’ll be amazed at how many payments ‘fly below the radar’, outstay their welcome and become a drag on your financial progress.
So, let’s start with insurance. Are you getting your money’s worth, and where can you start looking for the best options?
Firstly, think about the last time that you took a look at your insurance plans. Was it a while ago? There may be a few surprises there that you’re not expecting. With busy lives and the commotion of day to day, it’s easy to let these things slide. Especially, when you have ‘set-and-forget’ payments.
When reviewing your insurance spending, an excellent place to start is with a check-up on your car, home and contents insurances.
Shop around and make sure that you’re getting the best deal to save money.
If you have a mortgage, the savings you can generate from re-financing might surprise you. In an era of record-low interest rates, there are some tremendous low-rate offers out there for those who qualify.
Again, start by taking the time to sit down and review how much you are spending on your mortgage. You may be paying more than you need to, look out for the interest rate (assuming that this is a variable interest rate), the amount of your repayments and whether these include any fees and, also, whether or not you are paying an annual home loan fee.
Setting Aside Tax
If you are self-employed, have you been putting your tax aside on a regular basis? This is an easy way to keep on top of what is a major but easily forgotten expense. Better to deal with it regularly and early than letting it sneak up on you.
If you are GST-registered then it is a good idea to put that aside as well ahead of each quarterly BAS payment deadline.
If you aren’t already doing this then don’t hit the panic button. Now is the best time to start putting money aside. Once you have got used to this practice it will become second nature and better budgeting will see you saving money that used to go to last-minute tax payments.
Family and Joint Spending
Getting – and staying on – the same financial page as your partner will turbo-charge the monetary progress you can make together. A couple pulling in the same financial direction will make infinitely more progress than two people who are going in opposite directions.
Discussing your financial plans with your partner on a regular basis is the key to success, as it ensures that you iron out any differences on an ongoing basis, rather than letting financial differences of opinion grow into something that slows your monetary journey.
Once you get the hang of this as a couple, you will start to love the positive outcomes to which these discussions lead, as financial empowerment gives you an array of life choices that you would never have thought possible before you decided to cash in on ‘the power of two’.
More than ever before, we live in a subscription age. With the relatively recent explosion in technology, we now have a ‘platform economy’ comprised of Netflix, Spotify, Amazon and the like.
This proliferation in consumer services means that we now have more choice than ever before. It also means, though, that we need to adapt our financial behaviour accordingly. It has become so easy to duplicate and accumulate subscriptions, some of which no longer serve our needs and, therefore, weigh on our finances.
Look through the direct debits which are coming out of your account at least once a year – either at tax time or in the summer holidays (or, preferably, both), to ensure that every dollar you spend is earning its keep. If it’s not, give it the heave-ho and watch your money grow that much faster as a result.
It’s Time to Save Money
Reviewing your spending is like pruning your financial tree. As a result, your finances will be leaner, meaner, healthier and easier to manage. In the same way that a tree which is pruned then grows that much faster, you will experience more rapid financial growth after such an exercise.
That’s why you will find that this investment of time is the gift that keeps on giving.
If you are looking to get serious about saving money, it might be time to consider a financial coach. As an industry leading personal financial coach, I am happy to help you reach your goals. Call 1300 98 38 61 for a free conversation on your financial goals and how we could work together to achieve them.